City governments throughout the Sacramento region spent money at a rate that outpaced population growth during the boom years of this decade – and they're now living with a sobering morning after.

From 2001 to 2007, the area's population jumped 25 percent. But local government expenditures – adjusted for inflation – grew about 50 percent to roughly $2 billion, according to a Bee analysis of financial reports from every city in Sacramento, Yolo, Placer and El Dorado counties.

On top of that spending, many local governments also accumulated a mountain of debt.

Today, cities are facing the consequences: As property and sales tax revenues dry up, most municipalities are trying to scale back through employee layoffs and cuts to services.

In Sacramento, for example, leaders will cut budgets of all departments by 20 percent, with the exception of police and fire. Folsom is cutting expenditures 10 percent citywide and leaving several dozen positions open.

"I'm not sympathetic," said Peter Gordon, professor of policy, planning and development at the University of Southern California.

Gordon said cities often spend money to satisfy interest groups, or simply because it's there. "I think the California story is that governments grow in good times."

Officials in several cities said sharp spending increases during boom years followed slow times and tight budgets. Many also said they saved money during the good years – just not enough for the sudden and steep fall now causing problems.

"We had this influx of money coming in," said Russell Fehr, the city of Sacramento's treasurer and former finance director. "When there is money on the table, (the City Council's) job is to provide services."

The city of Sacramento saw total expenses go from $416 million during the 2001 fiscal year to $693 million in 2007, according to a review of its annual budgets.

Adjusted for inflation, that's a spending growth rate of 43 percent. Meanwhile, the city's population increased 15 percent.

Police spending in Sacramento – adjusted for inflation – rose 44 percent, according to the city's annual financial reports. Fire spending went up 70 percent. Parks and recreation expenses rose 53 percent.

Other factors added to the spending pressure, Fehr said. First, city employees got new contracts with at least 4 percent raises, making up for years of smaller raises. And North Natomas grew from farmland to suburb in five years. The new community needed services.

Citywide, the improvements and services required more people – the number of city employees increased from 4,200 during 2001 to 5,200 during 2007, the city's financial report shows.

Despite the spending, Sacramento did make an effort to save for tough times, Fehr said. Over the last few years, some $70 million went into reserves, but the current economic downturn has mostly depleted that.

Now Sacramento faces a $58 million budget gap. And that gap, between what the city takes in and pays out, is forecast to grow. By 2013 it's expected the city will need cumulative cuts of about $200 million, according to city officials.

It's a similar situation in Roseville, where between 2002 and 2007 the population jumped roughly 22 percent and the city built 20 new parks and a $15 million library. Spending increased 40 percent, the city's financial reports show.

Now the city is eliminating 40 jobs, through voluntary departures and retirements.

It's also reducing spending on materials, supplies, travel and overtime. The city is exploring privatizing some parks maintenance work, city spokeswoman Megan MacPherson said.

Roseville's cuts might have been deeper if not for job growth in the city's energy, health care and retail industries.

Like many other cities, Roseville felt the need to expand services as population increased. In 2005, the city built a 160-megawatt, natural gas-fired power station. In 2007, gas to fuel the station cost $25 million.

Roseville also got wealthier during the boom, with the arrival of many Bay Area transplants.

Call The Bee's Phillip Reese, (916) 321-1137.