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budget_conference.jpgNoting billions of dollars in unpaid bills the state has for pensions, schools and health care, Gov. Jerry Brown today touted what he called a "very measured" election year budget proposal despite a state surplus.

"We've got lots of long-term liabilities," Brown said. "It isn't time to just embark on a whole raft of new initiatives, and that's the problem."

Brown is proposing a $154.9 billion spending plan from all funds, about a 5 percent increase over the current year. It increases spending on schools and social service programs and dedicates $11 billion to pay down part of what Brown calls a "wall of debt."

But Brown said the surplus is based on a volatile source of income - capital gains taxes from stock market gains -- and urged caution.

"We've tried to keep it very measured," he said.

Brown highlighted the need for a rainy-day fund, but offered few details about how it would differ from a measure approved by the Legislature in 2010 that is already on the November ballot. Unions and other groups have said the proposal is too restrictive.

"I think that provides a lot of incentive to come up with some better alternatives," Brown said, adding that he wants to work with legislative leaders on a rainy-day account that is "more flexible and workable."

"The difficulty in drawing one is you don't know what the world is going to look like in a few years," he added.

Advocates for the poor have decried years of flat benefits and cuts to social programs and healthcare, and repeatedly called for spending increases as the state's fiscal outlook improves.

Brown downplayed those concerns. "We can always do more," he said, but California stacks up well against other states.

Brown also came out against a proposed oil-severance tax championed by some environmental activists. "I don't think this is the year for new taxes," he said.

PHOTO: Gov. Jerry Brown speaks about his budget proposal at a news conference at the Capitol on January 9, 2014. The Sacramento Bee/Alexei Koseff


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