California's Proposition 2, a constitutional amendment on the November 2026 ballot, would raise the Budget Stabilization Account cap from 10% to 20% of General Fund revenues while expanding rules for capturing surplus capital gains revenue and protecting school funding during downturns. Democratic leaders, including Governor Newsom and legislative majorities, placed the measure on the ballot in June 2026 after recent budgets drew down reserves despite rising revenues, exposing limits in the current Gann Limit framework. This bipartisan-backed reform addresses fiscal volatility from asset-based taxes and aligns with historical patterns where voters approve reserve-strengthening measures amid economic uncertainty. Trader consensus at 68.9% for passage reflects the absence of organized opposition and the proposal's focus on long-term budget stability.