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.
