By Dan Walters
Published: Tuesday, Feb. 5, 2013 – 12:00 am | Page 3A
Last Modified: Tuesday, Feb. 5, 2013 – 7:34 am
Capitol politicians have a sorry record in handling revenue windfalls, both real and imaginary.
In 2000, the state saw a one-time, $12 billion spike in revenue, thanks largely to a selling frenzy by holders of stock and stock options as a high-tech bubble burst.
Everyone knew that it was a one-time windfall, but then-Gov. Gray Davis and legislators of both parties committed two-thirds of it to permanent spending and tax cuts, leading to huge budget deficits that fueled the recall of Davis.
Six years later, with Davis successor Arnold Schwarzenegger seeking re-election, the state experienced another, albeit smaller, windfall and it, too, was quickly spent, thus worsening the state’s budget deficits from the subsequent recession.
At least those revenue surges were real, although short-lived. Two years ago, as Gov. Jerry Brown and legislators faced another budget gap, they solved it – on paper – by assuming the state would get an extra $4 billion in revenue, extrapolated from a couple of months of higher-than- expected tax collections.
Everyone in the Capitol knew that the $4 billion was most likely bogus, but it served the politicians’ expedient purpose of “balancing” an otherwise unbalanced budget and thus restoring paychecks to legislators that had been cut off because of missing a budget deadline.
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