We have several honored guests present today. Our budget is balanced. Our government certainly more efficient. Our schools a little bit better funded and our future is certainly brighter. Now is the time to dust off big dreams, to expand and reaching for those mountains. After all, theyre on the principle that risk too far together we discover how far we can go. As long as theres skilled workers and hard working students find a dream of a College Education out of their financial grasp and allow redundant regulations and red tape to strangle our Economic Growth in innovation, the california promise will still be broken. My friends and fellow 49er faithful, california is in the red zone thanks to your hard work. Now is not the time to sit on the ball. This is a year for all of us to set a national example. This is the year to take advantage of the sunnier skies to repair our neglected roof and the year california stops settling for good enough and replaces it with great again. With that, its my honor to introduce a leader whos doing exactly what he promised to do, to tell the truth. To get californias fiscal house in order to bring down the mountain of debt and to demonstrate that this state can be progressive without being profligate and above all else, continue to make the case that the best is yet to come. A big round of applause for our governor edmond brown. Thank you mr. Speaker, fellow constitutional officers. All my friends gathered here this morning. California is once again confounded our critics. In just two years, a solid and enduring budget and by god, were going to preserve and keep it that way for years to come. [ applause ] this is my longest speech. Were not going to get out of here if we dont keep moving. Against those who take pleasure seeing our demise, california did the impossible. You, the legislature, cast difficult votes to cut billions from the state budget. Curbed prison spending through a historic realignment and reformed and reduced the long term pension liabilities. Then the citizens of california using their inherent political power under the constitution finished the task. They embraced the new taxes of proposition 30 by a healthy margin of 55 to 44 . [ applause ] Michelle Obama members of the legislature, i salute you and the unions, their leaders. You showed what ordinary people can do when theyre united and organized. I salute those leaders of california business and the individual citizens who proudly stood with us. I salute the teachers and the students and the parents and the college presence, the whole school community. When describing what stirs people to action, feeling begets feeling and great feeling begets great feeling. You were alarmed, stirred yourself to action and victory was the outcome. That was 2012. What a year. Both 2011 and 2012 were remarkable. You did great things. Renewable energy mandate, the workers compensation, the reorganization of state government, protecting our forests and strengthening our timber industry, reforming our welfare system and launching the first high speed rail system in the nation. But of course, governing never ends. We have promises to keep and the most important one is the way to the people if proposition 30 passed. Guard the money temporarily made available. This means living within our means and not spending what we dont have. Fiscal discipline is not the enemy of our good intentions, but the basis for realizing them. Its cruel to lead people on by expanding good programs only to cut them back when the funding disappears. This isnt progress. Its not even progressive. Its an illusion. The stop and go, the boom and bust serves no one. Were not going back there. This budget is balanced but great risk and uncertainties lie ahead. The federal government, the courts, our changes in the economy all could cost us billions and drive a hole in the budget. The ultimate cost of expanding our Healthcare System under the Affordable Care act are unknown. Ignoring unknown unknowns would be folly. Theyre known unknowns. Thats how we plunge into a decade of deficits. Recall the story of genesis and the dream of seven cows. Fat, flesh and wealth fever came out of the river followed by seven other cars, lean flesh and ill favored. The lean cows ate up the fat cows. The pharaoh could not endure that the seven fat cows were seven years of great plenty and seven lean cows were seven years of famine would immediately follow. The pharaoh took the advice of joseph and stored great quantities of grain during the years of plenty. When famine came, egypt was ready. The people who have given us seven years of extra taxes, let us follow the wisdom of joseph, pay down our debts and store up reserves against the leaner times that will surely follow. In the midst of the great depression, Franklin Roosevelt said theres a mysterious cycle in human events. To some generations, much is given. Of other generations, much is expected. This generation has a rendezvous with destiny. We, right here in california, have such a rendezvous with our own destiny. We see doubt and skepticism about our future and that of americas, but we have accomplished together all the people in this room and what youll accomplish coming up. Indeed, the whole history of california belies such pessimism. Member how california began. Orders were issued to jose de galvez. Occupy and fortify. San diego and monterey, for the crowd of spain. The brave men made their way slowly north in an unchartered path. They reached monterey, but couldnt recognize the bay in the dense fog. With their surprise failing, they marched back to san diego, forced to eat the flesh of pack mules to stay alive. Undaunted, provisions from baja, california, and promptly organized the second expedition, he retraced the steps northward along what was to become el camino royal. The rest is history, of bull pioneers meeting every failure with even greater success. The founding of the missions, sold off in more than 50 years. The displacement and the devastation of a native people, the discovery of gold, the coming of the 49ers, adventures from every continent. First, by the thousands and then by the hundreds of thousands and during the civil war, under president lincoln, the Transcontinental Railroad and land grant colleges founded by the university of california, oil production, movies and aircraft industry. The longest bridge in the world, grand water projects, laboratories, venture capital, silicon valley, hewlett packard, google and countless others existing and still just imagined. What is this but the most diverse, creative and longest standing mass migration in the history of the world. Thats california and we are sons and daughters. This special destiny never ends. It slows. It falters. It goes off the track in ignorance and prejudice, but soon resumes again, more vibrant and more stunning in its boldness. The rest of the country looks to california. Not for whats conventional, but for whats necessary. Necessary to keep faith with our courageous forebearers. It pales in comparison to those who discovered and each decade thereafter built a more abundant california. As legislators, its your duty and privilege to pass laws. What we need to do for our future will require producing hundreds of new laws each year. The great writer of the 16th century wisely wrote, there is little relation between our actions, which are in perpetball mutation. The most desirable laws are the rarest, simplest and most general. Think it would be better to have none at all than in such numbers as we have. Constantly expanding the coercive power of government by adding each year so many minute prescriptions to detailed legal system overshadows other aspects of public service. Individual creativity and direct leadership must also play a part. We do this not by commanding thou shall or thou shall not but to organize people. Lay the Ten Commandments next to the Education Code and youll see how far we diverged in approaching content to that forms the basis of our legal system. In the right order of things, education, the early fashioning of character and the formation of conscience, comes before legislation. Nothing is more determinant of our future than how we teach ouchdren. If we fail at this, grow social chaos and inquality that no law can rectify. In californias public schools, theres six Million Students, 300,000 teachers, all subject to tens of thousands of laws and regulations. This year, we have a principal in every school, a superintendent and a governing board School District and then the state superintendent and the state board of education which makes rules and approves endless waivers, laws just passed. And then theres the congress which passes laws like no child left behind and then the federal department of education whose rules, audits and fines reach into every classroom in america, where 60 Million Students study, not 6. 3million California School aged children speak english and more than 2 million live in poverty and we have a funding system thats overly complex, bureaucratically driven and inequitable. Thats the state of affairs today. The fashion demands curricula and accountability data. All the better to require quiz bits of information, regurgitated at regular intervals and stored in vast computers. Invoked like talismans. Demanding quantitative measures and a stark single donor to encapsulate the precise Achievement Level of every child. We seem to think education is a thing like a vaccine that can be designed from afar, but as the irish butler yates said, education is not the filling of a pail, but the lighting of a fire. This year, as you consider new education laws, consider the principle of subsidiarity. The idea that a Central Authority should perform tasks that cannot be performed at a more immediate or local level. Higher or more remote levels of government like the state should render assistance to local School Districts, but always respect their primary jurisdiction and the dignity and the freedom of teachers and students. Subsidiarity is offended when distant authorities prescribe in minute detail what is taught, how it is taught and how it is to be measured. I prefer to trust our teachers in the classroom each day doing the real work. Lighting fires in young minds. [ applause ] my 2013 budget lays out the case for cutting categorical programs and putting maximum authority and discretion back at the local level with School Boards and thats due to approve a brand new local control formula, distributing supplemental funds over an extended period of time to School Districts based on the real World Problems they face. This formula recognizes that a child in a family making 20,000 a year or speaking a language different from english or living in a foster home requires more health. Equal treatment for children in unequal situations is not justice. [ applause ] with higher education, cost pressures are relentless and many students cant get the classes that they need. A half million fewer students this year enrolled in Community Colleges than in 2008. Graduation in four years is the exception and transition from one segment to the other is difficult. In california, the cal state system and the Community Colleges are all working on this. The key here is thoughtful change, working with the faculty and the College President s. But tuition increases are not the answer. Im not going to let the students of california become the [ inaudible ] of colleges and universities. [ applause ] california was the first in the nation to pass laws implementing president obamas historic Affordable Care act. Our Health Benefit exchange called covered california will be next year providing insurance to californians. They will steadily reduce the number of uninsured. They will deal with issues decided quickly to get the Affordable Care act started by next january. The broader expansion of medical is incredibly complex and takes more time. The right relationship with the counties. Given the cost involved, great prudence should provide every step of the way. California lost 1. 3 million jobs. Go biz and thank you, john, its your bill, one of the good bills, directly assisted in more than 5,000 companies this past year. One of the companies was Samsung Semiconductor headquartered in korea. Go biz persuaded samsung to locate their only Research Development in the world, the new facility in san jose will place up to 5,000 people in high skill high wage jobs. We also leveled the field on Internet Sales taxes with new jobs at Amazon Centers and patterson San Bernardino and now tracy. This year, we should change both the Enterprise Zone Program and the job hiring credit. They arent working. We also need to rethink and streamline a regulatory procedure, and cut needless delays. [ applause ] californias export that gives the republicans something to cut. Californias exports are booming and never stronger. Its deep. When the chinese immigrants crossed into the pacific in 1848 to the next president in los angeles last february. This year well take another step to strengthen the ties between the second and ninth largest economies. Trade an Investment Mission to china with the council and open the trade and Investment Office in shanghai. Central to the life of our state is water. And sits about water to the san joaquin delta. Farmers on the east side of the san joaquin between fresno and Current County and between tracy and urban Southern California and northern costa are all critically dependent on the delta for water. If because of an earthquake, used to call it a 200 year storm, but might be a hundred year storm, last one is the 1860s, or a sea level rise, if the delta fails, the disaster would be comparable to Superstorm Sandy or hurricane sandy, loss of jobs. Ill do whatever i can to make sure that doesnt happen. My proposed plan is two tunnels 30 miles long and 40 feet wide designed to improve the ecology of the delta with almost 100 square miles of habitat restoration. Thats big, but so is the problem. Lasted a short while and cost 15 billion, about the same as this project. This will serve californians for hundreds of years. When you think about californias future, no long term liability presents as greater danger to our well being as the buildup of Carbon Dioxide and others in the atmosphere. According to the latest report in the world bank, Carbon Emissions are the highest in 15 years. The plant could warm by more than 7 degrees fahrenheit, unknown event in human experience. Some of you will be around for that. I wont. California is extremely vulnerable because of our mediterranean climate and reliance on snow pack for so much of our water supply. Tipping points can be reached before we know weve passed them. Theres a different kind of challenge than we ever faced, requiring to act now even though the worst consequences are perhaps decades in the future. Again, californias leading the way and reducing the emissions required by eb32 and meet our goal of getting emissions