Governor Jerry Brown is expanding healthcare coverage to millions of Californians. It's part of his revised budget, which also calls for a plan to fully fund the teachers' retirement system and to cut into the state's $11-billion debt.  The full tab is a record $107-billion, although it does set aside $1.6-billion to a rainy day fund agreed upon last week.

"This is taking a big bite out of our long term obligations," Brown said.

We've seen mixed reaction. Assembly Republican Leader Connie Conway praises the rainy day fund, but hopes Brown can hold the line on any further spending...

"I think my friends across the aisle will have deep discussions amongst themselves because it seems to me they all have different priorities and they all cost money," she said.

Her counterpart in the Senate, Bob Huff, says Brown deserves credit for trying to tackle liabilities, even if Republicans would have gone about it a different way.

Some Democrats have expressed interest in spending more of the state's tax surpluses, but Brown cautions expenditures have also increased.

Hoover Institution Research Fellow Bill Whalen says the governor and state Legislature don't have a lot of time to work out any differences over his plan.

"More money means more ideas on how to spend, which gets into an argument between the governor and democrats in the legislature who dominate legislative matters over priorities," he explained.

Whalen added that the state government has until June 15th which is the constitutional deadline to pass the budget but the real deadline is effectively June 30th when the fiscal deadline expires.  Brown says the revision shows California can afford to provide healthcare to many more people while at the same time paying its debts and fixing the "long-troubled teachers' retirement system."

The budget now moves to the legislature, where some lawmakers may concentrate on what's not in it.

They may be worthy, but there's just not enough money for every program. That's the message from Governor Brown as he heads into budget talks. Noticeably omitted from the plan is funding for an expansion of transitional kindergarten for all the state's four-year-olds, something Pro Tem Darrell Steinberg has been pushing. He'll also face increased demand for expanding social service programs.

"Cuts that were made to in home services were never meant to be permanent," said Democratic Senator Cathleen Galgiani of Stockton.

Republicans take issue with the governor’s proposal to spend money from the cap-and-trade program on the high-speed rail system.