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State of the State Auuiess
Remaiks as Piepaieu
}anuaiy 22, 2u14
I am heie touay to iepoit on the state of oui state, choosing to ignoie those who say
that Aiticle S of oui Constitution, which iequiies the goveinoi to iepoit to the
Legislatuie, is outuateu; that you can't iepoit on the conuition of oui state fiom
Saciamento because Califoinia is too spieau out anu too uiveise. It occuiieu to me
that these ciitics - who have long ieciteu oui state's uecline - peihaps have nothing
to say in the face of Califoinia's comeback - except, "please, uon't iepoit it." Well, I'm
going to iepoit it, anu what a comeback it is: A million new jobs since 2u1u, a
buugetaiy suiplus in the billions anu a minimum wage iising to $1u an houi!
This yeai, Califoinians have a lot to be piouu of. Foi a uecaue, buuget instability was
the oiuei of the uay. A lethal combination of national iecessions, impioviuent tax
cuts anu too much spenuing cieateu a financial sink hole that uefieu eveiy effoit to
climb out. But thiee yeais latei, heie we aie - with state spenuing anu ievenues
soliuly balanceu, anu moie to come.
Foi that, I thank all of you - foi youi couiageous anu ueuicateu legislative woik. It is
tiuly impiessive. I also want to thank the membeis of my auministiation who have
woikeu so haiu to help make all this happen. But above all else, I think we shoulu
thank the voteis of Califoinia. In 2u1u, thiough Pioposition 2S, they establisheu a
majoiity vote foi passage of the state buuget. That enueu the giiulock. Then, in
2u12, they appioveu the tempoiaiy tax incieases of Pioposition Su. These two
initiatives, togethei with the iecoveiing economy anu the tough uecisions you took,
maue all the uiffeience.
But we aie not out of the woous anu we ceitainly aie not out of the uiought. Life is
unceitainty, the climate is changing - not foi the bettei - anu the business cycle anu
the stock maiket aie histoiically volatile, with goou yeais followeu by bau, with
Anu while we know oui ievenues will fluctuate up anu uown, oui long-teim
liabilities aie enoimous anu evei giowing. Let me list some of them: 0vei $1uu
billion foi pensions oweu to state woikeis, teacheis anu juuges; tens of billions
neeueu to covei ietiiee health caie; anu $6S billion neeueu to maintain anu keep
oui ioaus, builuings anu othei infiastiuctuie in sounu iepaii. We also must account
foi futuie iisks that coulu negatively affect oui buugets like congiessional uecisions,
natuial uisasteis anu the unceitain costs of the Affoiuable Caie Act.
So we can't go back to "business as usual." Boom anu bust is oui lot anu we must
follow the ancient auvice, iecounteu in the Book of uenesis, that }oseph gave to the
Phaiaoh: Put away youi suiplus uuiing the yeais of gieat plenty so you will be
ieauy foi the lean yeais which aie suie to follow.
Nost goveinois anu legislatuies - in mouein times - have foigotten this auvice. This
time we won't uo that. We will pay uown oui uebts anu iemembei the lessons of
histoiy. The Ameiican philosophei, ueoige Santayana, famously saiu: "Those who
cannot iemembei the past aie conuemneu to iepeat it." To help us keep oui fiscal
iealities in minu, I have some playing caius with a chait fiom this yeai's buuget
summaiy that shows oui last 1S buugets. It's not pietty. So I ueciueu to put a pictuie
of Suttei on the othei siue to keep oui spiiits up. It will make you smile but also help
us not foiget.
Fiscal uiscipline is not the enemy of oui uemociacy but its funuamental pieuicate.
To avoiu the mistakes of the past we must spenu with gieat piuuence anu we must
establish a soliu iainy uay funu, lockeu into the Constitution.
In 2uu4, the people voteu foi a iainy uay funu which was founu to be unwoikable. In
2u1u, you cieateu anothei iainy uay funu, now scheuuleu foi the Novembei
Election. But this latest effoit uoesn't give the state the option to pay off uebt,
uoesn't ueal with the ups anu uowns of Pioposition 98 anu uoesn't account foi
spikes in capital gains. So let's fix these flaws befoie going to the voteis. This is woik
that must be accomplisheu in the next few months.
Last yeai, I spoke of the piinciple of subsiuiaiity, a iathei clunky woiu that
neveitheless points to a piofounuly impoitant piinciple, namely that in oui feueial
system theie aie sepaiate layeis of goveinment, each with its own uistinct
iesponsibilities. The 0xfoiu English Bictionaiy uefines subsiuiaiity as the iuea that a
"cential authoiity shoulu have a subsiuiaiy function, peifoiming only those tasks
which cannot be peifoimeu effectively at a moie immeuiate oi local level."
No bettei example of this can be founu than in youi enactment last yeai of the Local
Contiol Funuing Foimula. This was a majoi bieakthiough in the way funus aie
allocateu to Califoinia's schools so that oui laws explicitly iecognize the uifficult
pioblems faceu by low-income families anu those whose fiist language is othei than
English. As a iesult, those with less aie going to ieceive moie anu that is goou foi all
But something else is at woik in this Local Contiol Funuing Foimula. Insteau of
piesciiptive commanus issueu fiom heauquaiteis heie in Saciamento, moie geneial
goals have been establisheu foi each local school to attain, each in its own way. This
puts the iesponsibility wheie it has to be: In the classioom anu at the local uistiict.
With six million stuuents, theie is no way the state can miciomanage teaching anu
leaining in all the schools fiom El Centio to Euieka - anu we shoulu not even tiy!
Last week, S24 people fiom acioss the state tiaveleu to Saciamento to speak to the
State Boaiu of Euucation about the meiits of this new law anu the iegulations which
shoulu be auopteu unuei it. Piincipals, teacheis, stuuents, paients, ieligious gioups
anu lawyeis, all came foiwaiu to expiess theii views. Now that shows inteiest anu
ieal commitment! But theii woik is just beginning. Each local uistiict now has to
put into piactice what the Local Contiol Funuing Foimula has maue possible. That,
togethei with new Common Coie stanuaius foi math anu English, will be a majoi
challenge foi teacheis anu local auministiatois. But they aie the ones who can make
it woik anu I have eveiy confiuence they will.
In a similai vein, in the fielu of public safety, we have changeu histoiic piactices in
oui piison system anu tiansfeiieu significant iesponsibilities to local authoiities.
The Feueial couits, backeu up by the 0niteu States Supieme Couit, have oiueieu
majoi ieuuctions in oui piison population anu uiamatic impiovements in the
meuical anu mental health piogiams that the state makes available. In iesponse, we
have tiansfeiieu the supeivision of tens of thousanus of lowei level offenueis fiom
the state to oui S8 counties. This iealignment is bolu anu fai ieaching, but necessaiy
unuei the ciicumstances. Anu local law enfoicement has iisen to the occasion.
0ui piisons aie pioneeiing new piogiams anu tieatments - anu so aie the counties.
Last week, I visiteu the Leiuo }ail just noith of Bakeisfielu anu sat in on some
classes. It was moving to heai the men's stoiies anu the stiuggles they encountei. It
was also inspiiing to see the enthusiasm of Sheiiff Bonny Youngbloou anu his
effoits unuei iealignment to woik with piobation, the uistiict attoiney, local juuges
anu the police to tiy new ways to uetei ciime anu help offenueis stiaighten out theii
0f couise theie aie issues with iealignment, but togethei - with oui local paitneis -
we aie facing them. We have plenty of woik aheau of us, incluuing builuing moie
capacity at the state anu county level anu becoming moie effective with those who
suffei mental illness oi who aie uiug auuicteu. But we aie on the iight tiack.
In all this, youi legislative woik - paiticulaily funuing - is ciucial but we shoulu
nevei lose sight of the ieality that life is local anu that so many things we tiy to uo
heie in the State Capitol can only be hanuleu by local iepiesentatives anu leaueis.
They ueal not with the abstiactions of law but with the flesh anu bloou ieality of
eveiyuay life. That's a lesson I leaineu fiisthanu as mayoi of 0aklanu.
Among all oui unceitainties, weathei is one of the most basic. We can't contiol it.
We can only live with it, anu now we have to live with a veiy seiious uiought of
Right now, it is impeiative that we uo eveiything possible to mitigate the effects of
the uiought. I have conveneu an Inteiagency Biought Task Foice anu ueclaieu a
State of Emeigency. We neeu eveiyone in eveiy pait of the state to conseive watei.
We neeu iegulatois to iebalance watei iules anu enable voluntaiy tiansfeis of
watei anu we must piepaie foi foiest fiies. As the State Watei Action Plan lays out,
watei iecycling, expanueu stoiage anu seiious giounuwatei management must all
be pait of the mix. So too must be investments in safe uiinking watei, paiticulaily in
uisauvantageu communities. We also neeu wetlanus anu wateisheu iestoiation anu
fuithei piogiess on the Bay Belta Conseivation Plan.
It is a tall oiuei.
But it is what we must uo to get thiough this uiought anu piepaie foi the next.
We uo not know how much oui cuiient pioblem ueiives fiom the builu-up of heat-
tiapping gasses, but we can take this uiought as a staik waining of things to come.
The 0niteu Nations Panel on Climate Change says - with 9S peicent confiuence -
that human beings aie changing oui climate. This means moie uioughts anu moie
extieme weathei events, anu, in Califoinia, moie foiest fiies anu less snow pack.
As you know, of all the states, anu even of most of the countiies of the woilu,
Califoinia is the leauei in uealing with climate change. Fiom AB S2, to oui builuing
anu appliance efficiency stanuaius, oui ienewable poitfolio stanuaiu anu oui
suppoit of electiic vehicles, Califoinia is leauing the way. Neveitheless, in teims of
gieenhouse gases, oui biggest challenge iemains the amount of gasoline
Califoinians use. Each yeai, oui motoi vehicles use moie than 14 billion gallons of
gasoline to tiavel ovei SSu billion miles. To put those numbeis in peispective, the
sun is 9S million miles away. Reuucing oui oil consumption, two thiius of which is
impoiteu by ships anu tank cais, will take time, bieakthiough technologies anu
steaufast commitment. It will also iequiie that the countiies which buin the most
fossil fuel join with us. We've staiteu builuing those paitneiships with othei states
anu countiies like China. We will go to Nexico next. Califoinia can't uo this alone.
In so many othei ways, Califoinia is a pioneei. We have 2S peicent of the nation's
foieign boin anu we aie the fiist state in mouein times to have a pluiality of families
of Latino oiigin. So it's not suipiising that Califoinia is the state wheie immigiants
can not only uieam - they can uiive.
We aie also the state of innovation, of Silicon valley anu moie ventuie capital
investment than any othei state - by fai.
We'ie on oui way to a million electiic vehicles anu we'ie builuing the nation's only
We'ie expanuing health caie coveiage to millions moie. Anu, Califoinia is the
nation's leauei in ueveloping meuical anu scientific auvances that will cuie uiseases
anu lowei costs. We have six of Ameiica's twelve top-peifoiming metiopolitan aieas
in biotechnology: San Biego, San }ose, San Fiancisco, 0aklanu, Los Angeles anu
0iange County. Last yeai, we cieateu a tax cieuit to help innovatois, in these iegions
anu beyonu, hiie anu expanu in Califoinia. Foui out of the woilu's twenty leauing
acauemic bioscience institutions aie locateu heie in Califoinia: 0CSF anu Beikeley,
0CLA, Stanfoiu anu 0C San Biego. }ust as Califoinia has leu the way with stem cell
ieseaich, so too can we pioneei the new fielu of piecision meuicine which uses
genomics, meuical uevices, computei sciences anu othei fielus to tieat inuiviuual
patients, insteau of bioau populations.
Yes, Califoinia is a leauei in so many ways. But, the uangeis anu uifficulties we face
can nevei be taken lightly. We still have too many stiuggling families, too much uebt,
anu too many unknowns when it comes to oui climate. 0veicoming these challenges
will test oui vision, oui uiscipline anu oui ability to peiseveie. But oveicome them
we will anu as we uo, we will builu foi the futuie, not steal fiom it.
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