Brown: Calif. comes back but challenged by drought

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Associated Press

Posted on January 22, 2014 at 1:05 PM

Updated Wednesday, Jan 22 at 3:04 PM

SACRAMENTO, Calif. (AP) — Gov. Jerry Brown on Wednesday delivered dual messages in his annual address to the Legislature: California's resurgence is well underway but it's threatened by economic and environmental uncertainties.

Chief among those uncertainties is that the severe drought gripping the nation's most populous state and already forcing water cutbacks among farms and cities, could eventually exact a financial toll on the state's improving finances.

In the State of the State address, Brown said it was not clear what role heat-trapping gases have played in creating three years of dry weather, but he said the excessively dry conditions should serve "as a stark warning of things to come."

"This means more droughts and more extreme weather events, and, in California, more forest fires and less snow pack," he said, a week after declaring an official drought.

"We need everyone in every part of the state to conserve water," he told the state's 38 million residents. "Water recycling, expanded storage and serious groundwater management must all be part of the mix. So too must be investments in safe drinking water, particularly in disadvantaged communities."

Lawmakers are considering changing or delaying an $11.1 billion bond scheduled to go before voters in November. Brown also has proposed a $25 billion plan to build two 30-mile underground tunnels to ship water from Northern California to Southern California.

Brown, who has delivered more State of the State addresses than any other governor in California history, delivered a restrained speech that was largely without surprises.

He touched on the state's financial turnaround after years of budget deficits, and noted his continued efforts to reduce the state's prison population and equalize public school funding.

Brown noted that a million new jobs have been created since 2010 and that the state faces budget surpluses in the billions of dollars for the foreseeable future, thanks to a surging economy and tax increases approved by voters in 2012.

Yet he also said California continues to face financial challenges that could imperil its future, including $100 billion in pension liabilities for state workers, teachers and judges, tens of billions more for retiree health care and $65 billion to maintain roads and other public works.

Brown, 75, only briefly mentioned the $68 billion high-speed rail project that is a priority of his but has lost much of its public support and is under scrutiny.

His address Wednesday came less than two weeks after he delivered his state budget proposal for the fiscal year that starts in July, outlining a vision that embraces frugality even as tax revenue soars to a record level.

The $106.8 billion general fund he proposed is nearly 9 percent more than spending in the current fiscal year. That includes $45.2 billion for K-12 schools, a year-over-year increase of nearly $4 billion.

Brown's vision for how the education money is to be spent — laid out in last year's address— is starting to take effect.

Last week, the state Board of Education approved sweeping new rules that direct school districts to funnel billions of dollars of new revenue toward schools that serve high numbers of students from low-income families, who are English-learners or are in foster care. The additional money is generated partly by temporary increases in sales and income taxes that Brown persuaded voters to approve in 2012.

Many Republican lawmakers have embraced Brown's message of frugality while questioning whether his fellow Democrats will go along after years of cutbacks to their favorite programs.

"I remain skeptical that a majority of Democrats in the Legislature share this vision," said Assemblyman Donald Wagner, R-Irvine, in a statement, calling for reducing taxes and regulations to improve the state's business climate.

The governor has not yet declared whether he will seek re-election, although he is widely expected to do so and has collected nearly $17 million for a campaign. It would be his last term as governor after serving from 1975 to 1983 then returning to the office in 2011. Alluding to his tenure, he said, "My message: There is no substitute for experience."

He would face two official candidates, both Republicans: Assemblyman Tim Donnelly, R-Twin Peaks, a tea party favorite, and former U.S. Treasury official Neel Kashkari.

Donnelly said Brown's speech sounded like a campaign rollout but was devoid of solutions for restoring the state's prosperity, repairing its infrastructure and cutting regulations.

"I was shocked by the complete lack of any cognizance of how most Californians feel," Donnelly said.

Kashkari criticized Brown for failing to address poverty, low-performing schools and California's unemployment rate, which remains at 8.5 percent.

"Instead of doing the hard work of fixing these problems, Gov. Brown is focused on touting record-high spending and building a crazy train that the state doesn't want and can't afford," Kashkari said in a prepared statement.

Assembly Speaker John Perez, D-Los Angeles, said that the governor's drought declaration and his comments will draw attention to the water crisis and hopefully spark a broader discussion and update the water bond to include conservation, environmental mitigation, groundwater and surface storage and access to quality water.

"I think that is exactly what we need to spur the stakeholders and my colleagues in both houses to get a water bond that is supportable by the public, passed this year," Perez said.

Brown provided a moment of levity during the nearly 18-minute speech when he held up a playing card with an image of his dog, Sutter, on one side, and a graph of the state's huge recurring deficits on the other.

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