Wednesday morning Gov. Jerry Brown delivered his annual State of the State address.
While Brown touted "a million new jobs since 2010, a budgetary surplus in the billions and a minimum wage rising to $10 an hour," he was also cautious about what lies ahead.
"We are not out of the woods and we certainly are not out of the drought, said Brown. "Life is uncertainty, the climate is changing – not for the better – and the business cycle and the stock market are historically volatile, with good years followed by bad, with painful regularity."
Brown stressed the importance of a solid rainy day fund to address "longterm liabilities" such as over $100 billion for pensions owed to state workers, teachers and judges; tens of billions needed to cover retiree health care; and $65 billion needed to maintain and keep roads, buildings and other infrastructure in sound repair.
Future risks that could negatively affect state budgets include congressional decisions, natural disasters and the uncertain costs of the Affordable Care Act, Brown said.
KPCC and Take Two carried the address live and followed with analysis with hosts A Martinez and Tess Vigeland, as well as KPCC’s Frank Stoltze, Molly Peterson and Zocolo's Joe Mathews.
On the "rainy day" fund:
Joe Matthews: "He’s proposing a very small rainy day fund. Less than two billion dollars in a budget of more than 100 billion. That’s nothing. A real rainy day fund to make a difference in the next recession or big decline in revenues probably has to be something more like 20 percent, so you’re talking about 20 billion dollars.
On the drought:
Frank Stoltze: "It could have a big economic impact on the state. It could be hard times for ag (agriculture) and other industries and therefore state (tax) revenues could go down."
On what was missing:
Molly Peterson: "The water bond we’ve been talking about since 2009 … a lot of people say that’s the way we’re going to get through some major issues to our water infrastructure and he’s proposing nothing about it."