Dan Walters

By Dan Walters
Published: Tuesday, Jun. 3, 2014 – 12:00 am
Last Modified: Tuesday, Jun. 3, 2014 – 12:09 am

It’s been nearly a decade since the Capitol’s politicians last had a substantial amount of extra money to spend.

During the mid-2000s, a short-lived housing boom poured billions of extra dollars into the state’s coffers, and politicians pumped them out as fast as they came in. General fund spending exploded by nearly 30 percent in three years.

Then-Gov. Arnold Schwarzenegger was an eager spender to overcome declining popularity as he sought re-election in 2006.

Schwarzenegger used the windfall to placate interest groups – unions, particularly – that had whipped him a year earlier on ballot measures, even though the revenue jolt, everyone knew, was temporary.

Within two years, the economy was in free fall, revenues were plummeting, and the state had begun to run up massive budget deficits.

It was not the first time that Capitol politicians had squandered a short-term spurt of revenues. But would it be the last?

That’s the overarching issue as the final process of writing a 2014-15 budget begins. Revenues have been climbing sharply, due both to an expanding economy and a temporary tax hike voters approved in 2012.

Schools and health care for the poor automatically claim much of the extra money. Gov. Jerry Brown is willing to spend a bit more but worries aloud about what may happen when the economy cools and the temporary taxes expire.

He wants to divert a big chunk into a “rainy-day fund,” plus pay down short- and long-term debts, and is publicly scornful about costly new entitlements.

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