00:00Proposition 2 would allow the state's Rainy Day Fund to rise as a percentage of the state budget from 10
00:08% to 20%.
00:09Some background is necessary to understand all this.
00:12Back when Jerry Brown was governor, the state had just been through a severe fiscal crisis as a result of
00:19the Great Recession.
00:20California's revenues rose and fell with the fortunes of Wall Street.
00:24It had an acute shortage in years when Wall Street did particularly badly.
00:27So Jerry Brown came up with the idea of a Rainy Day Fund.
00:30That allows the state to put away a small amount of money that can be used later to balance the
00:35budget in slow years.
00:37But they set a cap on 10% of the annual budget.
00:40The proposition that's before voters in November would double that to 20%, allowing more money to be saved.
00:46Sounds reasonable, except critics say that California doesn't really have a savings problem, it has a spending problem.
00:52And that the problem with the state budget is that legislators simply don't know when to stop spending.
00:57You wouldn't need to save as much for the off years if you didn't spend as much every year.
