Reporting from Sacramento -- After years of economic pain and deep budget cuts, Gov. Jerry Brown declared California to be “on the mend,” saying the state is emerging from financial turmoil and proclaiming his dedication to a string of ambitious public projects.

Delivering his annual State of the State speech to a joint session of the Legislature on Wednesday, Brown acknowledged more spending reductions to come, saying they are needed to complete the “unfinished business” of closing a $9.2-billion budget gap.

But the reference to austerity was a passing mention in a 20-minute address dominated by the sunny optimism that characterized the state during Brown’s first governorship, more than three decades ago.

“California has problems,” the governor said, “but rumors of its demise are greatly exaggerated.”


He proposed large investments in infrastructure, urging construction of the nation’s first bullet train, as well as significant changes in the state’s education and public pension systems.

The speech, which drew moderate applause and a few chuckles, stood in stark contrast to last year’s, his first State of the State address after being elected in 2010. Then, he focused on fiscal discipline, offered no major policy proposals and appealed to lawmakers in both parties to support tax hikes to balance the budget.

But after months of outreach, he failed to break Sacramento’s persistent gridlock — a key campaign pledge — working instead with the Democratic majority to cut more deeply into higher education and social services.

Keeping a low profile, he signed an essentially on-time budget that contained relatively few accounting gimmicks, which improved California’s credit rating — victories perhaps better appreciated by bureaucrats than by voters.


In outlining his ambitions Wednesday, Brown, who is 73, made clear he wants to be seen as more than California’s fiscal caretaker.

His proposals would couple his legacy to that of his father, the former Gov. Pat Brown, a legendary chief executive whose investment in universities, freeways and waterways helped make California an economic behemoth.

He took that message on the road immediately after his speech, going first to Los Angeles City Hall, where he redelivered the entire address to a couple of hundred guests and political dignitaries. He later met with teachers at Bret Harte Elementary School in Burbank. On Thursday, he is scheduled to visit business and civic groups in Irvine and San Diego.

Before launching into his speech in the Capitol, Brown showed flashes of his unscripted style, chiding GOP leaders for prematurely responding to the address in a video that was accidentally posted a day early.


“My speech wasn’t finished 24 hours ago,” he said, singling out the minority leaders of both houses. “I didn’t know that you were psychics and you possessed the powers of precognition and clairvoyance. After the speech, I want to check with you on some stock tips.”

A few moments later, railing against “declinists,” Brown gave a full-throated defense of the embattled high-speed rail project, urging the Legislature to approve the sale of billions of dollars in bonds to help fund the first section of track. The 520-mile system planned between Los Angeles and San Francisco has been beset by soaring costs and criticism from lawmakers and others.

“Those who believe that California is in decline will naturally shrink back from such a strenuous undertaking,” Brown said. “I understand that feeling, but I don’t share it, because I know this state and the spirit of the people who choose to live here.”

The governor likened critics of the bullet train to those who derided many earlier public projects: the Central Valley Water Project, the interstate highway network, even the Panama Canal.


He also called for restoration of the Sacramento-San Joaquin Delta and an overhaul of California’s water-delivery system, an achievement that eluded the younger Brown in his first governorship.

He said California’s landmark global warming law had positioned the state to be a leader in renewable energy development. And he predicted the state again would be an economic incubator, similar to the role it played in the high-tech industry, creating millions of new jobs.

Brown talked briefly about the tax increases he hopes to put before voters this year, having failed to persuade Republicans to support such a move last year. The new levies would be fair, temporary and “half of what people were paying in 2010,” he said.

He estimates that his proposed ballot measure, which qualified for petition circulation Wednesday, would generate between $5 billion and $7 billion annually by raising levies on sales and upper incomes.


The governor also asked for changes in public schools, saying the state has overemphasized student testing and calling for local officials to have more control over their budgets. He asked state lawmakers to remove requirements that districts spend certain funds on specific programs.

In Sacramento, labor leaders seized on Brown’s building proposals.

“The governor’s plan to upgrade our failing infrastructure isn’t optional if we hope to rise above the recession,” said Art Pulaski, head of the California Labor Federation. “We simply can’t sustain a vibrant economy if we don’t invest in the infrastructure that supports it.”

But Republicans accused Brown of being dishonest with the public. He is asking voters to approve higher taxes even as the recovering economy boosts state revenue — and simultaneously proposes new spending California can’t afford, they said.


“We have a different vision,” said Bob Huff of Diamond Bar, GOP leader in the state Senate. “The governor’s vision is: Tax people more. Our vision is: Enable business, make government lean and more responsive, and you will get what you want.”

Democrats, while praising Brown for his infrastructure vision, expressed concern about the impending cuts that the governor glanced over in his speech.

“Given that we have made such significant cuts to what were already limited-size programs, it’s going to be tough for us to do much more,” said state Sen. Mark Leno (D-San Francisco), chairman of the Senate Budget Committee.

Still, Democrats embraced Brown’s optimism.


“We need to be fiscally responsible. But we also need to think big,” said Assemblyman Bob Blumenfield (D-Woodland Hills), chairman of the Assembly Budget Committee. “And those are not incompatible.”

michael.mishak@latimes.com

anthony.york@latimes.com

Los Angeles Times staff writers Patrick McGreevy and Chris Megerian contributed to this report.