Budget Surplus Grows Faster Than Expected

SACRAMENTO —  As the late rapper the Notorious B.I.G once mused, “Mo Money, Mo Problems.”

Those words may ring true to Gov. Gray Davis after the state legislative analyst’s office announced Friday that it expects even more surplus money--perhaps billions more--to fill state coffers than previously anticipated.

The added funds could translate into more budget headaches for Davis, as legislators and special interest groups use the surplus as ammunition in their battle to cut gasoline taxes, increase education spending and beef up transportation funding, among other causes.

Gas tax opponent Assemblyman Tom McClintock (R-Granada Hills) said Davis should remember what happened to the last California governor who sat on a massive surplus, referring to Gov. Jerry Brown and voters’ subsequent passage of Proposition 13.

The Legislature, McClintock added, should also take note.

“With only a portion of the money . . . they could overnight grant a permanent 15 cent-per-gallon reduction in the price of gasoline at the pump,” McClintock said.

California Teachers Assn. President Wayne Johnson, meanwhile, called on Davis to use the mounting funds to boost spending in public schools and raise it to at least the national average.

The governor wants to bring the amount spent on each California student to $6,313 a year, which the legislative analysts office contends is still about $500 less than the national average. Legislative Analyst Elizabeth Hill forecast in February that the state would collect $4.2 billion more in taxes this budget year and next than Davis included in his proposed $88-billion spending plan.

On Friday, however, Hill’s office announced that state revenues were growing even faster than predicted. “We’re finding cash receipts in early 2000 have been extraordinarily strong . . . exceeding the January budget forecast and substantially exceeding our own projections,” said Brad Williams, senior economist with the legislative analyst’s office.