Gov. Jerry Brown, jubilant in a wide-ranging and at times lyrical speech, declared Thursday that California "has once again confounded our critics," arriving at a balanced budget after years of crippling deficits.
"We've wrought in just two years a solid and enduring budget," Brown said in his annual State of the State address. "And by God, we're going to preserve and keep it that way for years to come."
Brown credited lawmakers for casting "difficult votes to cut billions from the state budget" in recent years, and he praised voters for approving his November ballot measure to raise taxes.
"Two years ago, they were writing our obituary," Brown told a joint session of the Legislature. "Well, it didn't happen. California is back, its budget is balanced and we are on the move."
Brown called for investment in a massive water project and high-speed rail.
Still, the Democratic governor, who famously declared in his 1976 State of the State address that California was "entering an era of limits," also cautioned lawmakers Thursday to "guard jealously the money temporarily made available" by his tax initiative, Proposition 30.
"This means living within our means and not spending what we don't have," Brown said. "Fiscal discipline is not the enemy of our good intentions, but the basis for realizing them."
Brown, who served as governor before from 1975 to 1983, said California's recent history of boom-and-bust spending served no one, expanding state programs in robust years only to cut them back later.
"We're not going back there," he said.
Though the budget is balanced, Brown said, "great risks and uncertainties lie ahead," including potential changes in the economy and funding decisions by the federal government.
The address was loftier and at more than 24 minutes, longer than many of Brown's previous speeches.
His remarks followed the November passage of Proposition 30 and the release of a budget plan this month in which Brown declared an era of state deficits to be at an end.
Brown restated his commitment to California's $68 billion high-speed rail project and to his controversial plan to build a pair of tunnels through the Sacramento-San Joaquin Delta to ship water south.
"Yes, it's bold," Brown said of the rail project. "But so is everything about California."
Brown said little new in his address. He called for a special session of the Legislature to prepare for implementation of the national health care overhaul, as he announced last year that he would do.
He reiterated his desire to modify California's signature environmental law, the California Environmental Quality Act, and to overhaul the state's K-12 funding system to give more money to districts with poorer students.
He asked the Legislature to limit the number of laws it passes, noting that "individual creativity and direct leadership must also play a part . Lay the Ten Commandments next to the California Education Code and you will see how far we have diverged in approach and in content from that which forms the basis of our legal system."
He said he has directed state transportation officials to "review thoroughly our current priorities and explore long-term funding options," though it was unclear to what end.
Brown also said the trade mission he planned last year to lead to China will happen in April. Brown is seeking to open a privately financed trade office in Shanghai. California has not had an official presence in China since 2003, when the state closed its foreign trade offices.
"From a business perspective, there's a lot to be encouraged about," said Jim Wunderman, president of the Bay Area Council, the group working with the Brown administration to open the Shanghai office.
Republican reaction to the address was mixed.
"I think at the end of the day, the governor was preaching a lot of Republican values smaller government and good reforms," said state Sen. Tom Berryhill, R-Oakdale.
Democrats hold supermajorities in both the Senate and the Assembly, and Berryhill said Brown is "clearly the adult in the room."
Senate Republican leader Bob Huff, R-Diamond Bar, said Brown struck good even "Republican" themes in his address, but he suggested that Brown's rhetoric may not match his agenda.
"He talks about fiscal conservatism pretty well, but the reality is, his budget's increasing by 25 percent over the next three years," Huff said.
He said, "I would have liked to have heard a lot more about jobs."
Predictably, Democratic lawmakers were highly complimentary, with Assembly Speaker John A. Pérez of Los Angeles and Senate President Pro Tem Darrell Steinberg of Sacramento both praising Brown.
"The state has been through such tough times and to stand here in January of 2013 and hear a governor not only reflect on these last several years and what we have all come through together but to point us toward so much potential to build and to achieve going forward, it really is a very good moment here in the history of our state," Steinberg said.
Brown writes speeches himself, and his office said he was working on the State of the State as recently as Wednesday. He was seen in the Capitol basement Thursday morning going over the address.
At times, Brown seemed to speed through his speech. Following an early round of applause, Brown said he was about to give one of his longer addresses.
"Let's not applaud too much," he said. "We're not going to get out of here if we don't keep moving."
In his State of the State speech Thursday, Gov. Jerry Brown:
Called for a special legislative session to implement the national health care overhaul by next January.
Announced he would lead a trade mission in April to China, with help from the Bay Area Council, and officially open the state's new trade office in Shanghai.
Argued for a new local control funding formula for K-12 school districts based on "real world problems," and vowed not to let students become "the default financiers" of the state's higher education systems.
Promised to work to make his two proposed water tunnels through the Sacramento-San Joaquin Delta a reality.
Reiterated his commitment to the state's high-speed rail project.
Advised lawmakers to pay down the state's debts and store up reserves for lean times.