08/21/2013 02:45 pm ET Updated Oct 21, 2013

Don't Rush to Ease the State's Long-Term Debt

After several tough years of weathering the Great Recession, California is clearly on the comeback trail. Unemployment is down and our credit rating is up. California has moved up to once again be ranked the eighth largest economy in the world.

Our economy is growing faster than those of 44 other states, and our revenues have rebounded better than those in all but one state. The budget deficit is gone. Surpluses are in sight. And our budgets are being passed on time -- three years in a row for the first time in 30 years.

After all the hard choices that have helped put California's fiscal house in order, it is vital we act prudently going forward. That will require a balanced approach of maintaining fiscal responsibility, working to increase prosperity, making vital investments in our future and addressing long-term obligations in a prudent way.

The best barometer of maintaining fiscal responsibility is the state budget. The budget we just approved in Sacramento is balanced, with a reserve of $1.1 billion, and is structurally balanced throughout the entire forecast period. The budget also pays down $4.2 billion in budget debt, including more than $2.1 billion in deferrals to schools.

Along with continuing budget stability, we have set the stage for crafting a rainy-day fund for the November 2014 ballot that protects the budget against California's notorious revenue volatility.

The boom and bust of the stock market and capital gains tax revenues have led to overcommitment of spending and tax relief during the boom cycles and devastating cuts and difficult tax increases during the bust cycles. Under my proposal, spiking capital-gains revenues will be deposited into the rainy-day fund -- rather than committed to ongoing budget commitments. Then, the rainy-day fund can be drawn down during economic downturns to avoid the tax increases and devastating cuts.

To help spur business growth, we have permanently cut the time for the secretary of state to process business filings from more than 60 days to no more than five days.

Most recently we modified the enterprise-zone program to help areas of the state that were hit the hardest during the recession, improving hiring credits for employers, adding incentives for employers to hire veterans and people who have been jobless for more than six months and ensuring that companies statewide that purchase equipment for manufacturing, processing, refining, or recycling will not have to pay state sales tax on those purchases beginning in July 2014.

Because of the fiscal discipline we have shown, as well as new revenues from the growing economy, for the first time in a long time California is able to make strategic investments that will strengthen our future.

One of the best investments we can make is in shoring up California's struggling middle class. That's why I wrote the law establishing the Middle Class Scholarship, which, starting in 2014, will slash student fees at UC and CSU up to 40 percent for families making less than $100,000 and up to 10 percent for families earning $150,000.

Calls to immediately address all the state's long-term obligations would, frankly, stall our recovery ("Address California's long-term debt Leviathan," Our Views, July 25). We have taken California from issuing IOUs to paying all its bills as they come due.

The economy needs to get even stronger before we're in a position to pay toward bills that haven't even arrived yet. For instance, while some are pointing to the long-term obligations of the California State Teachers Retirement Fund as an immediate drain on the state's coffers, it is more prudent -- and less jostling to the recovery -- to address the shortfall through incremental planned increases in contributions from the school districts, the teachers and the state.

To some, taking a prudent approach on our road to recovery may seem like "fixating on the present," but the long-term payoff will be worth it. In fact, every Californian should support state leaders fixating on fiscal responsibility, increasing prosperity, investing in our future and appropriately addressing our long-term obligations.

This article originally appeared in the Riverside Press-Enterprise.