In a surprising political pivot, California Lieutenant Governor Eleni Kounalakis has decided to withdraw from the 2026 gubernatorial race and instead run for State Treasurer. This strategic move comes after months of speculation and signals significant changes in the state’s upcoming election landscape.

Kounalakis, who has been in the governor’s race since 2023, made her announcement on social media, emphasizing her commitment to California’s financial future. “At this moment, I believe I can make the greatest impact by focusing on California’s financial priorities,” she stated, specifically highlighting her intention to address the state’s challenging housing affordability crisis.

Her decision opens up new possibilities in the gubernatorial race, potentially benefiting candidates like Katie Porter, who has been polling strongly. Porter, known for her progressive stance and ability to win in swing districts, appears to be emerging as a frontrunner following Kamala Harris’s earlier decision not to run.

The political landscape now includes several notable candidates such as former Los Angeles Mayor Antonio Villaraigosa, Xavier Becerra, and Riverside County Sheriff Chad Bianco. Kounalakis’s withdrawal could redistribute critical Bay Area donor support and political networks among these candidates.

Coming from a politically connected family, Kounalakis has deep roots in Democratic circles. Her father, Sacramento developer Angelo Tsakopoulos, has been a significant financial supporter of her political career, previously contributing $5 million to her first campaign in 2018. She also brings unique experience as California’s first female Lieutenant Governor and a former US Ambassador to Hungary.

Kounalakis will now compete against former Oakland Mayor Libby Schaaf for the Treasurer position, setting the stage for what promises to be an intriguing political contest. Her move demonstrates the dynamic and strategic nature of California’s political ecosystem, where ambitious politicians continuously adapt their career trajectories.

As the 2026 election approaches, California voters can expect a vibrant and competitive race that reflects the state’s complex political landscape.