SACRAMENTO (AP) — Gov. Jerry Brown urged fiscal caution Thursday as he laid out his next agenda for California in his State of the State address.

“You are not going to hear me talk today about any new programs. Rather I am going to focus on how we pay for the commitments we have already have,” the governor said.

He outlined the state’s boom-and-bust economy that he said tracks a global economy that is “profoundly uncertain.”

The Democratic governor also decried wage stagnation he said has plagued many Americans and outlined the state’s response that has included an increased minimum wage, stronger wage laws protecting unionized workers and an earned income tax credit.

“We also know that inequality has risen sharply in recent decades,” he said in his prepared remarks. “We have seen the disappearance of many middle class jobs and the growing share of income taken by the top 1 percent and even more so by the top .01 percent.”

He said California has “wholeheartedly embraced the Affordable Care Act,” enrolling 13.5 million Californians in Medi-Cal and another 1.5 million in Covered California.

But those benefits come at a price, he said, noting that total Medi-Cal costs have grown by $23 billion in four years. As a result, he urged lawmakers to build up the state’s rainy day fund.

The 77-year-old Democrat is entering his sixth year as governor after previously holding the post from 1975 to 1983. This time around he is more focused on initiatives he deems critical.

His 2016-2017 fiscal year budget proposal also involved some of his other priorities. He stressed the need to dedicate surging one-time tax revenues to the rainy day fund, saying another downturn in the economy could be just around the corner.

That has prompted criticism from social welfare advocates who think California should spend more of its windfall to help those who are not benefiting from the state’s booming economy.

California Republicans were praising the message of fiscal restraint, but GOP lawmakers were critical of Brown’s push Thursday to raise taxes and fees for transportation infrastructure.

Republican Sen. Patricia Bates of Laguna Niguel says Brown’s emphasis on paying existing commitments is “right on target.” But Bates says the governor undermined his point by pushing for higher taxes.

Assembly Minority Leader Chad Mayes of Yucca Valley says California must spend more of the money it already collects on transportation before considering a tax hike.

Brown called a special session last year to deal with a backlog in transportation infrastructure needs, but his effort has not gained traction.

He urged lawmakers Thursday to “bite the bullet” and approve new taxes and fees.

Brown retains immense political clout, along with at least $24 million in his campaign bank account, which he can use to support or oppose any of a slew of initiatives making their way to the ballot this year.

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