Gov. Jerry Brown proposed a $113.4 billion budget for the fiscal year 2015-16, which begins July 1, and is about $1.5 billion more than the current year budget.

The budget is balanced and sets aside $2.8 billion in the state’s rainy-day fund.

While Brown did not have to deal with the expansive deficit he faced in 2011 when he presented his first budget, he still had to address, manage and balance several important issues that have major budgetary consequences.

“This carefully balanced budget builds for the future by saving money, paying down debt and investing in our state’s core needs,” said Brown in a press release. “Our long-term fiscal health depends on the wise and prudent actions we take today.”

Increased spending for the state’s secondary school, college and university funding, expanding Medi-Cal coverage, responding to water needs, retiree costs for health care and pensions, as well as debt service and rainy-day savings were among the many issues Brown addressed during his budget conference.

In a press release, State Sen. Jeff Stone (R-Riverside County) applauded the governor for the fiscally prudent measures contained in his proposed budget.

Stone added that he looked forward to working with the governor to find ways to formulate a responsible and balanced budget. “With estimated state revenues coming in higher than expected, the governor needs to continue to pay off California’s debts and not launch new and expensive programs,” said Stone.

Funding for kindergarten through 12th grade schools will increase $4.8 billion to a total of $65.7 billion in 2015-16. Another $2.3 billion will be made available to schools this fiscal year.

“The greatest consensus we have for spending in California is for education,” Brown said during his press conference.

“Ongoing K-12 Proposition 98 per-pupil expenditures in the budget are $9,667 in 2015-16, an increase of $306 per pupil over the level provided in 2014-15, and up significantly from the $7,008 per pupil provided in 2011-12,” according to the governor’s Budget Summary.

The governor’s budget proposal also recommends changes to school facility construction programs. This will be negotiated with the legislature.

Higher education funding also increases about $1.1 billion, but Brown wants the money for the state’s universities to be contingent on holding tuition steady and fewer out-of-state students.

Since 2012-13, the number of Medi-Cal participants has increased by nearly four million enrollees to 12.2 million people, or 32 percent of the state’s population. Medi-Cal General Fund spending is projected to increase 4.3 percent from $17.8 billion in 2014-15 to $18.6 billion in 2015-16.

“This is real money going to real people,” Brown stated. “Health security will improve the quality of their lives. One of biggest causes of bankruptcy is medical bills.”

The state’s employee and retiree health care has received limited attention in recent years. State health-care benefits remain one of the fastest growing areas of state government. The budget includes nearly $1.9 billion for retiree health-care benefits for 2015-16. These payments are fourfold what the state paid in 2001 ($458 million) and now represent 1.6 percent of the General Fund. Long term, these liabilities exceed $100 billion.

Worried about the accelerating liability for retiree health-care benefits, Brown is proposing to share these costs and to increase the amount of prefunding. Many tenets of the plan involve the collective bargaining process, and he will bring them to the bargaining table as public employee unions’ contracts come up for negotiation.

“If we don’t reign these things in, down the road there will be drastic cuts just like there were in the last few years,” Brown warned.

The budget also includes $532 million from the recently approved water bond measure. These funds will be used for a variety of purposes, including watershed protection, water storage, recycling and groundwater sustainability.

Another $93.5 million is being proposed for responses to the existing drought. Cal Fire would receive $59.4 million to continue firefighter surge capacity and additional defensible space inspectors.

Cal Fire also will receive funding to initiate a procurement to replace its existing helicopter fleet.

Brown also recommends a one-time increase of $16.8 million to continue existing service levels throughout the state park system. The budget request also allocates $20 million for deferred maintenance in the state park system.

A newly established transformation team is charged with identifying improvements for the state park’s long‑term fiscal operations. A two‑year funding commitment of $3 million is for the team of experts to develop solutions and evaluate the recommendations of the Parks Forward Commission.