SACRAMENTO, Calif. -- The state's fiscal analyst said Wednesday that California's long-tattered budget is on the verge of producing surpluses, but he cautioned that Gov. Jerry Brown and lawmakers must first avoid a spending spree.

The improved outlook comes after voters approved two tax initiatives last week, and the California economy and housing market showed signs of perking up. State leaders have also cut programs in recent years.

It was the nonpartisan legislative analyst's most optimistic fiscal forecast since the dot-com boom 12 years ago. It shows a relatively small $1.9 billion deficit through June 2014 against a $97.7 billion general fund, followed by annual surpluses that grow beyond $9 billion in 2017-18.

"For the first time since about 2001, we actually show us being in the black," Legislative Analyst Mac Taylor said. "This is a dramatic turnaround."

Those numbers, however, rely on assumptions that few Capitol veterans expect to hold – namely that Democratic lawmakers will keep programs at current spending levels after years of forcing allies to accept cuts and no cost-of-living increases. It also assumes steady economic growth and no broad federal tax hikes or deep spending cuts.

Spending demands are already hitting Sacramento. University of California officials made clear Wednesday they want more money next year, warning that tuition hikes may occur otherwise. Social service advocates have clamored to restore programs such as dental care for low-income adults in Medi-Cal.

Brown said in a statement that he intends to "continue to exercise fiscal discipline and pay down debt." But Democratic lawmakers will have a two-thirds supermajority, gaining the ability to increase taxes and fees on their own as well as greater leverage in negotiations with the governor.

"It's difficult to imagine anyone on the short end of those types of budget cuts accepting them without a fight," said Dan Schnur, director of the Jesse Unruh Institute of Politics at the University of Southern California. "If you're a legislator who has a battalion of interest groups outside your door trying to drag you in one direction and the governor on the phone trying to convince you to hold firm, it's not a fun place to be."

In the immediate budget cycle, the state faces a $1.9 billion deficit through June 2014, according to the Legislative Analyst's Office. Just one year ago, it predicted a $13 billion gap over a comparable time period, and a $25 billion shortfall the year before that.

Voters last week approved Brown's tax initiative, Proposition 30, to increase income taxes on top earners and sales taxes by a quarter-cent on the dollar to generate $6 billion annually through 2018-19. They passed a separate initiative, Proposition 39, to permanently raise taxes on some corporations by $1 billion a year.

Despite those new taxes, the analyst's office believes the state faces a short-term deficit largely because it will not receive about $1.8 billion that Brown expected from eliminating redevelopment agencies. The analyst also says state leaders can't use $400 million in cap-and-trade revenues to plug the budget, and California faces higher than predicted wildfire costs.

The immediate deficit would have been higher had Brown's Department of Finance not discovered a surprising amount of additional money this month. Finance officials said they revised their accounting of past revenues – mostly income taxes – to reveal an additional $1.4 billion available for the budget.