See Dan Walters: Davis’ version of budget crisis doesn’t square with history:
The undisputed fact is that after a severe recession ended in the mid-1990s, the state experienced a solid, if unspectacular, gain in tax revenues for four years before the highly volatile high-tech industry produced a spike in personal income taxes — about 12 extra billion dollars — that lasted just one year before revenues resumed their normal pattern of slow growth.
When the extent of the windfall became known in 2000, Davis publicly — and prudently — declared that it would be a mistake to enact major increases in ongoing spending, or major tax cuts, and promised to resist them. But succumbing to pressures from both fellow Democrats and Republicans, Davis soon agreed to commit roughly $8 billion of the windfall to tax cuts or new spending. And when revenues did return to normal levels, the state was left with a “structural deficit” of roughly $8 billion a year — one that will continue indefinitely.
The mistake of enacting those unaffordable tax cuts and spending increases was compounded in the subsequent three years by budgets that papered over the deficits with creative, if misleading, gimmicks, raids on other state funds and loans of various kinds.
It’s about spending like drunken sailors and a busted income tax system, not about Enron and the tech bust.