California Democratic leaders, including Governor Gavin Newsom, placed Proposition 2 on the November 2026 ballot to amend the state constitution by raising the Budget Stabilization Account cap from 10% to 20% of General Fund tax revenues while adjusting Gann limit interactions. The measure aims to build larger reserves during strong revenue periods to buffer future shortfalls, including potential federal funding reductions. Legislative passage showed unanimous Democratic support but minimal Republican backing, with critics arguing surplus funds should prioritize tax relief or debt reduction over expanded reserves. A May 2026 PPIC poll found 70% support among likely voters for increasing the cap, aligning with current trader consensus that reflects broad public preference for enhanced fiscal stabilization despite partisan divides and affordability concerns.