Lt. Gov. Eleni Kounalakis, the first boldfaced name to jump into the 2026 governor’s race more than two years ago, has dropped out and will run for state treasurer instead.
“At this moment, I believe I can make the greatest impact by focusing on California’s financial future,” she said in a statement Friday. “As State Treasurer, I will bring a deep commitment to fiscal responsibility, economic opportunity, and strategic investment in our state’s priorities — from affordable housing and clean energy to infrastructure and education.”
Her decision comes at an odd moment in the campaign for California’s top office. Just last week, former Vice President Kamala Harris announced that she would not run for governor next year, seemingly cracking the unsettled race wide open ahead of the June primary. That same day, former House Speaker Nancy Pelosi unofficially endorsed Kounalakis in a television interview.
But Kounalakis, who has served as lieutenant governor since 2019, had been sputtering in a crowded field of prominent but low-wattage Democrats. They also include former U.S. Rep. Katie Porter, former U.S. Health and Human Services Secretary Xavier Becerra, former Los Angeles Mayor Antonio Villaraigosa, former state Controller Betty Yee, former state Senate leader Toni Atkins, state Superintendent of Public Instruction Tony Thurmond and timeshare magnate Stephen Cloobeck.
A poll released Friday by Emerson College found Kounalakis running sixth, with only 3% support — behind the Los Angeles billionaire developer Rick Caruso, who has not even entered the race.
And despite significant personal wealth from her background as a real estate developer, Kounalakis struggled to fundraise for a campaign that could ultimately cost tens of millions of dollars to win. She recently reported raising only about $100,000 in the first six months of the year.
In her announcement, Kounalakis emphasized her experience developing housing and said addressing affordability would be a focus for her if she wins the treasurer’s office.
“I will ensure that we efficiently leverage every dollar at our disposal to increase housing production,” she said in a statement. “This work is critical and I am prepared for the challenge.