Skip to content
CapRadio

CapRadio

signal status listen live donate
listen live donate signal status
listen live donate signal status
  • News
    • beats
    • State Government
    • Environment
    • Health Care
    • Business
    • Arts and Lifestyle
    • Food and Sustainability
    • PolitiFact California
    • California Dream
    • Videos
    • Photos
  • Music
    • genres
    • Classical
    • Jazz
    • Roots
    • Eclectic
    • Videos
    • Daily Playlist
  • Programs + Podcasts
    • news
    • Morning Edition
    • All Things Considered
    • Marketplace
    • Insight
    • The View From Here
    • music
    • Acid Jazz
    • At the Opera
    • Classical Music
    • Connections
    • Excellence in Jazz
    • Hey, Listen!
    • Insight Music
    • K-ZAP on CapRadio
    • Mick Martin's Blues Party
    • Programs A-Z
    • Podcast Directory
  • Schedules
    • News
    • Music
    • ClassicalStream
    • JazzStream
    • Weekly Schedule
    • Daily Playlist
  • Community
    • Events Calendar
    • CapRadio Garden
    • CapRadio Reads
    • CapRadio Travels
    • Ticket Giveaways
  • Support
    • Evergreen Gift
    • One-Time Gift
    • Corporate Support / Underwriting
    • Vehicle Donation
    • Stock Gift
    • Legacy Gift
    • Endowment Gift
    • Volunteering
    • Benefits
    • Member FAQ
    • e‑Newsletter
    • Drawing Winners
    • Thank You Gifts
  • About Us
  • Contact Us
  • Close Menu
 We Get Support From:
Become a Supporter 
 We Get Support From:
Become a Supporter 
  • State Government
  •  

Should California's Rainy Day Fund Be Used Even When There's No Recession?

  •  Ben Adler 
Monday, June 27, 2016 | Sacramento, CA
Listen
/
Update RequiredTo play audio, update browser or Flash plugin.
  

When California voters approved a new state budget reserve two years ago, Democrats and Republicans urged its passage to help avoid steep cuts during the next recession.

Now, Democratic legislative leaders are suggesting the “Rainy Day Fund” could help alleviate what Gov. Jerry Brown's administration projects will be a $4 billion budget deficit in 2019 – even if there is no recession.

“What we would do would be to help prohibit more draconian cuts that we would be making anyway,” Assembly Speaker Anthony Rendon told reporters moments after the Legislature approved the budget deal earlier this month. He said that the Rainy Day Fund was created specifically for that purpose.

Senate President pro Tem Kevin de León expressed a similar sentiment to reporters earlier that same day when asked about the potential deficit: “We have healthy reserves, as well as going back to the Rainy Day Fund.”

Yet that $4 billion deficit projection assumes California’s economy continues to grow – in other words, no recession. So the upshot is that Rendon and De León are open to using the Rainy Day Fund to help erase a deficit created not by an economic downturn – but by spending decisions made by the governor and legislative Democrats.

De León's office declined comment on this story. A spokesman for Rendon said Assembly Democrats “are proud that this year’s budget contains the largest budgeted reserves in at least the last 30 years“ but did not clarify whether the speaker would support tapping the Rainy Day Fund outside of a recession.

“Because of the context of when this was passed, because of the way it was sold, most voters really did think we will only use this in case of an economic downturn,” says Loyola Law School political analyst Jessica Levinson.

“So what we have here is the decision that we are going to essentially spend ourselves into a deficit,“ she says, “but that it will be okay because we have this other account, the Rainy Day Fund.”

Turns out that’s actually legal: There's nothing in Proposition 2, approved by voters in November 2014, that bars use of the Rainy Day Fund unless there is a recession. As long as the governor declares a fiscal emergency, lawmakers can dip into the reserve with a simple majority vote in each house of the Legislature.

And to be fair, that $4 billion deficit is just one projection. Others believe the state is on track for a surplus – and a lot can change by 2019 anyway.

Nevertheless, Republicans say turning to the Rainy Day Fund outside of a recession is a bad idea.

“In using it to shore up our spending, instead of really using it to compensate for a decline in revenue, I think we’re missing the opportunity to protect California for when we really need that money,” says Assembly Budget Committee vice-chair Jay Obernolte.

On the other hand, Levinson says, Democrats and progressives have been pushing the Legislature to spend more money to help the most vulnerable Californians – so they might very well support using the Rainy Day Fund this way.


Follow us for more stories like this

CapRadio provides a trusted source of news because of you.  As a nonprofit organization, donations from people like you sustain the journalism that allows us to discover stories that are important to our audience. If you believe in what we do and support our mission, please donate today.

Donate Today  

    More about California Budget 2016

  • California Budget 2016

    Complete coverage of California's budgeting process for the year 2016-2017 -- from Gov. Jerry Brown's initial and revised proposals, to expert analysis and lawmaker reactions, to debate, revisions and eventual passage.

 California Budget 2016

Ben Adler

Director of Programming and Audience Development

Director of Programming and Audience Development Ben Adler first became a public radio listener in the car on his way to preschool — though not necessarily by choice.  Read Full Bio 

Coronavirus Newsletter

Get answers to your questions, the latest updates and easy access to the resources you need, delivered to your inbox.

 

Want to know what to expect? Here's a recent newsletter.

Thanks for subscribing!

We'll send you weekly emails so you can stay informed about the coronavirus in California.

Browse all newsletters

More State Government Stories

 Photo by Sora Shimazaki from Pexels

Justice Delayed: Courts Overwhelmed By Pandemic Backlog

January 20, 2021

AP Photo/Rich Pedroncelli, File

California Attorney General Files Nine Lawsuits In One Day As Trump Leaves Office

January 19, 2021

AP Photo/Rich Pedroncelli, File

High-Speed Rail In California Moves Along, But Slowly

January 21, 2021

Most Viewed

California Coronavirus Updates: Newsom Pushes Back Against Reopening Critics

California Coronavirus Updates: California’s Ban On Indoor Worship Upheld By Appeals Court

California Lifts COVID-19 Stay-At-Home Orders For All Regions

Sacramento County Is Expanding Vaccinations At Cal Expo, But Not Yet For The General Public

As California Loosens COVID-19 Rules, Experts Say Public Must Take Precautions To Prevent Another Spike In Cases

We Get Support From:
Become a Supporter

Most Viewed

California Coronavirus Updates: Newsom Pushes Back Against Reopening Critics

California Coronavirus Updates: California’s Ban On Indoor Worship Upheld By Appeals Court

California Lifts COVID-19 Stay-At-Home Orders For All Regions

Sacramento County Is Expanding Vaccinations At Cal Expo, But Not Yet For The General Public

As California Loosens COVID-19 Rules, Experts Say Public Must Take Precautions To Prevent Another Spike In Cases

Back to Top

  • CapRadio

    7055 Folsom Boulevard
    Sacramento, CA 95826-2625

    • (916) 278-8900
    • Toll-free (877) 480-5900
    • Email Us
    • Submit a News Tip
  • Contact Us

  • About Us

    • Contact Us / Feedback
    • Coverage
    • Directions
    • Jobs & Internships
    • Mission / Vision / Core Values
    • Press
    • Staff Directory
    • Board of Directors
  • Listening Options

    • Mobile App
    • On Air Schedules
    • Smart Speakers
    • Playlist
    • Podcasts
    • RSS
  • Connect With Us

    •  Facebook
    •  Twitter
    •  Instagram
    •  YouTube
  • Donate

  • Listen

  • Newsletters

CapRadio stations are licensed to California State University, Sacramento. © 2021, Capital Public Radio. All Rights Reserved. Privacy Policy | Website Feedback FCC Public Files: KXJZ KKTO KUOP KQNC KXPR KXSR KXJS. For assistance accessing our public files, please call 916-278-8900 or email us.