THE LATEST STATEWIDE population estimates provide another reminder to policy makers and elected officials across California that they must plan with caution — that budgeting to spend every penny in the coffers is irresponsible and risky.

In years past, we planned as if income tax revenues, driven by capital gains, would continue to soar; that property tax values, driven by housing prices, were limitless; that returns on public investments, driven by the stock market, could only go up. And that demand for services, driven by population increases, would continue rise steadily and consistently.

Using those assumptions, public agencies floated bonds to build new facilities, hired new staff, negotiated generous government worker wages and promised benefits and pension to employees that were unmatched in the private sector. We're now seeing that the financial house was built on an unstable foundation that has started to crumble and threatens to bring down the entire structure.

There is much pain ahead. Jobs will be cut and services curtailed, hurting the neediest among us the most. Salaries must be trimmed. Benefits must be brought under control. Sadly, much of the cost is being irresponsibly pushed off through borrowing onto the next generation.

This was avoidable. If only our leaders had remembered during the good times that we need to set aside money for a rainy day. If only they had heeded warnings that the economy could slip; tax revenues could falter; the housing and stock markets could tank; and, yes, as we saw this month from the state Department of Finance, even population growth could slow.

Statewide, the population growth rate reached 1.8 percent annually at the start of the decade. But for four consecutive years now, it has hovered at 1.0 to 1.1 percent. Cities that had experienced monstrous population increases in past years — such as Brentwood, Hercules, Oakley, San Ramon and Dublin — saw growth slow to a trickle.

Meanwhile, more established cities like Oakland, Berkeley, Richmond, Fremont, Hayward, Redwood City, San Mateo and Daly City have maintained very small, but relatively stable population growth.

It should all serve as a reminder that, just as most of us at any time could lose our source of income and should maintain savings accordingly, so too are our public agencies vulnerable to major swings in revenues.

Our local leaders should keep solid reserves on hand to buffer against the downturns and resist the temptation to commit to programs, salaries and benefits that are only sustainable when times are good.