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hostbrown.JPGGov. Jerry Brown said Wednesday that California is a "job creation engine," defending his administration's handling of the economy and state budget in a forceful election year speech.

"California is definitely back," Brown told about 1,300 people at the California Chamber of Commerce's annual Host Breakfast in Sacramento. "Just a few years ago ... a few pundits, a few national publications were talking about California as a failed state. Well, just 3 ½ years later, that deficit and that credit rating have been utterly transformed. We've eliminated -- we, I mean the Legislature and my office working together -- have eliminated a $27 billion deficit. That's never been done before, but we did it."

Brown, a popular Democrat, is widely expected to win re-election in this Democrat-leaning state. Facing criticism from Republicans over the state's high poverty and unemployment rates, Brown lauded the state's job growth, venture capital and agricultural production.

"This is a job creation engine," Brown said. "It's a place of imagination."

Brown, who is negotiating a budget with Democratic lawmakers and social service advocates eager for increased spending, warned billions of dollars in unfunded, long-term retirement liabilities could grow even higher.

"God help us if medical technology has some breakthroughs," he said, "and these people who are retiring don't live to 80, but they live to 100."

Brown has enjoyed a favorable relationship with state business interests, and he was applauded Wednesday. He leads a small field of Republican challengers by wide margins in fundraising and public opinion polls. Brown reported Tuesday that he had raised just more than $1 million from mid-March through mid-May, leaving him with nearly $21 million on hand for his re-election campaign.

PHOTO: Gov. Jerry Brown speaks at Wednesday's Host Breakfast. The Sacramento Bee/Randy Pench



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