rainy day fund

By capturing more stormwater, Newsom said, “we are creating a literal rainy day fund to help us recover from a multi-year drought and prepare for our hotter, drier future.”

“We are creating a literal rainy day fund to help us recover from a multi-year drought and prepare for our hotter, drier future.”

Newsom and lawmakers, as part of budget negotiations last year, reached a handshake agreement to make cuts, defer programs and take $7.1 billion out of the state’s rainy day fund, to address a projected shortfall in 2025-26.

Under the proposal presented Friday, Newsom essentially counted the withdrawal from the rainy day fund as part of the state’s normal revenue stream, instead of a solution they’ll adopt when they pass the budget later this year.

For years the governor has bemoaned the fact that money set aside in California’s rainy day fund counts as expenditures toward the state’s spending limit.