Governor Brown Has High Hopes for California Rebound

SACRAMENTO, Calif. (CN) - Gov. Jerry Brown said California is "on the mend" in a State of the State address that was long on extolling the Golden State's virtues, but short on substance and answers to ongoing budget woes that have hampered the state since the 1990s.

Speaking to a gathering of both chambers of the Legislature, Brown complimented lawmakers on reducing California's structural deficit by 75 percent in 2011. The reduction stemmed from spending cuts and the transfer of some state functions to local governments.

Brown took Republicans to task for blocking his attempts to put tax measures on last year's ballot, saying he won't allow that situation to happen again.

"For my part, I am determined to press ahead both with substantial budget cuts and my tax initiative," Brown said. "The cuts are not ones I like but the situation demands them."

"As for the initiative, it is fair," he continued. "It is temporary. It is half of what people were paying in 2010. It will protect our schools and guarantee - in the constitution - funding for the public safety programs we transferred to local government."

In his preliminary budget released earlier this month, Brown proposed a half-cent sales tax increase, as well as higher income tax rates for individuals making more than $250,000. Brown claims the tax increases will raise nearly $7 billion, although it is uncertain whether voters will agree to raise taxes on themselves.

Brown's entire budget for 2012-13 hinges on much higher revenue forecasts than the nonpartisan Legislative Analyst's Office thinks is realistic.

The tax measures go before voters in November 2012.

"California has problems but rumors of its demise are greatly exaggerated," Brown told lawmakers.

The governor touted California's commitment to green energy, saying that it will do for California's economy what the computer industry did for jobs during his first tenure as governor. He also applauded AB 32, the 2007 plan to "require less carbon in our fuels, more efficient technologies across a broad swath of businesses and a carefully designed cap and trade system that uses market incentives instead of prescriptive mandates."

A federal judge struck down portions of AB 32 last month, however, for giving an unfair advantage to California-based alternative fuel makers.

Brown also championed the high-speed rail project, a bond authorization that voters approved in 2008. Originally tagged at $33 billion, the project is currently estimated to cost nearly $100 billion - and not a single foot of track has been laid.

The project will lose all $3.3 billion of its federal funding if work does not begin by Sept. 30 under current federal policy.

Brown promised to restore funding for public education - which he labeled as the largest consumer of tax dollars - and gave a token mention to pension reform, charging lawmakers to "take up the issue and do something real."

"Three times as many people are retiring as are entering the workforce," Brown said. "That arithmetic doesn't add up. Benefits, contributions, and the age of retirement all have to balance. I don't believe they do today."

Brown still sang the Golden State's praises. "California is turbulent, less predictable, and, well, different," he said. "Contrary to those declinists, who sing of Texas and bemoan our woes, California is still the land of dreams."

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