Presented to the Senate Committee on Budget and Fiscal Review, this handout summarizes the key features of ACA 4—the rainy-day fund proposal currently on the November 2014 statewide ballot—and the Governor’s proposal for a different rainy-day fund mechanism. California’s state tax system is highly volatile, and the state has a poor track record of setting aside reserves when times are good to help balance the budget during later economic downturns. Designing a constitutional rainy-day fund mechanism, however, involves many complexities that require detailed consideration by the state’s leaders.