Proposition 2 would help California stabilize its budget by requiring more money for its rainy-day reserve and setting aside more funding to pay off debts.

What would you do if you suddenly found yourself flush with an unexpected cash windfall? 

Would you run out and treat yourself to something expensive and irresponsible? Or would you pay off your debts and sock the extra money away for a rainy day?

Proposition 2, which Democratic state lawmakers (and one Republican) placed on California’s November ballot, would encourage California to take the latter approach with its budget.

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Understanding how requires a bit of backstory.

California’s budget relies heavily on a progressive tax structure; 1% of the richest taxpayers account for 50% of the state’s income taxes. 

But this structure is volatile. If the stock market takes a hit, so do California’s tax revenues and the critical programs they fund — including schools, which account for a huge portion of the state’s budget since the passage of Proposition 13, the 1978 measure that limited local governments’ ability to raise property taxes.

When revenues nosedive, lawmakers at all levels of government typically ask voters to approve tax increases at the ballot box — when they can least afford them.

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On the flip side, when the stock market is booming, California is constrained by the Gann Limit, an obscure rule that prevents the state from spending more per taxpayer than it did in 1979 — the year voters approved the measure — once adjusted for inflation. Any money the state collects over the limit must be refunded to taxpayers or spent on certain purposes, such as infrastructure or education. 

In 2014, voters approved a ballot measure that stabilized this budget chaos. It did three main........

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