A major contender to become California’s next governor dropped out Friday.

Lt. Gov. Eleni Kounalakis said she will run for state treasurer instead in 2026.

“The decision was not made lightly,” Kounalakis posted on X. “At this moment, I believe I can make the greatest impact by focusing on California’s financial future.”

Kounalakis had the most money in her dedicated campaign account for governor — $4.6 million. But, her indecision about remaining in the race awaiting former Vice President Kamala Harris’ decision may have slowed fundraising. She reported only $107,015 raised in 2025, well below the $3 million raised by fellow Democrat Katie Porter. Harris opted not to run.

A former ambassador to Hungary in the Obama administration, Kounalakis won two terms as lieutenant governor in 2018 and 2022. She is the daughter of wealthy real estate developer Angelo Tsakopoulos.

Treasurer Race

Kounalakis is one of several familiar names in state politics who have filed for treasurer.

The top candidates and fundraisers include former Oakland Mayor Libby Schaaf ($426,501 cash on hand); former Speaker of the Assembly Anthony Rendon ($889,916); state Sen. Anna Caballero of Merced ($1 million); and state Sen. Ben Allen ($191,498). All are Democrats.

Current Treasurer Fiona Ma is termed out.

In her statement on X, Kounalakis prioritized housing affordability.

“I will ensure that we efficiently leverage every dollar at our disposal to increase housing production,” Kounalakis wrote.

Kounalakis also has another $4.6 million cash in her lieutenant governor account.

Governor’s Race

With Kounalakis and Harris out, several known names in state politics are fighting for front-runner status.

Porter, a former congresswoman who ran for U.S. Senate in 2024, has the most money raised as of the June 30 reporting date.

Billionaire Stephen Cloobeck, the CEO of timeshare company Diamond Resorts, recently infused his campaign with $10 million.

Another billionaire, real estate developer Rick Caruso, could enter the race.

Other top contenders include former state Senate President Toni Atkins, former Los Angeles Mayor Antonio Villaraigosa, State Superintendent of Public Instruction Tony Thurmond, and former state Controller Betty Yee. All are Democrats.

Former Fox News contributor Steve Hilton and Riverside County Sheriff Chad Bianco are the top Republican candidates.

A recent Emerson College poll shows Porter (18%) and Hilton (12%) in the lead.