Jerry Brown

Gov. Jerry Brown in Los Angeles on May 13. (Gina Ferazzi / Los Angeles Times / May 13, 2014)

Gov. Jerry Brown signed California’s new $156.3-billion budget on Friday, ensuring a permanent source of state funding for construction of the bullet train he has championed.

The budget, which includes a $108-billion general fund, $7.3 billion larger than last year's, also increases welfare payments and expands preschool for children from poor families.

Brown and state lawmakers also included a long-term plan for eliminating the shortfall in the teacher pension fund, one of California’s worst financial problems. The state, schools and employees will contribute more money into the fund, with schools bearing the brunt of the costs.

The governor hailed the budget as another step forward for a state that was infamous for financial mismanagement and dysfunction.

“California is demonstrating that the majority can actually govern, unlike Washington, which is mired in gridlock and partisanship and extreme polarization." he said. "State government in California is actually working.”

Brown signed the budget at San Diego City Hall, where he appeared with top lawmakers. The city is the hometown of the new Assembly speaker, Toni Atkins, and the next Senate leader, Kevin de Leon, who now lives in Los Angeles.

San Diego is also considered a Republican stronghold, and Brown’s opponent in the November election, Neel Kashkari, has allied himself with the city's mayor.

Kashkari has harshly criticized Brown for supporting the $68-billion bullet train, which has suffered from waning public support. The budget will direct one-quarter of the revenue from polluter fees to high-speed rail.

However, the project will still need to secure more funding. Rep. Kevin McCarthy of Bakersfield, the incoming Republican majority leader in the U.S. House, has pledged to oppose new federal money for the train.

House Minority Leader Nancy Pelosi, a Democrat from San Francisco, said during a recent trip to Sacramento that she'll continue fighting for the high-speed-rail funding. She dismissed concerns about members of her caucus, including four from California, who voted against such expenditures earlier this month.

With the cap-and-trade polluter-fee program now providing dependable money for bullet train construction, Pelosi said, it will be easier to secure funding from other sources.

"We're very pleased with the California budget and an assured stream of revenue coming from the climate change initiative," she said.

Brown said on Friday that the state risks falling further behind other areas of the world without a bullet train of its own.

“We want to be right up there with all the other nations," he said. "C’mon, let’s get with it.”

The budget takes effect on July 1. During negotiations on the measure, Brown persuaded lawmakers to use his administration's more conservative revenue estimates.

However, it's always possible that tax receipts won't keep pace with spending. Revenue is $582 million short of projections for the fiscal year that ends this month, which could leave less money for the new budget.

Brown defended his administration's estimates, noting that they're lower than figures from nonpartisan legislative analysts.

"I think we’re being prudent," he said.

Follow @chrismegerian for more updates from Sacramento