California Governor Jerry Brown is going to slash $12 billion in spending, raise another $12 billion in revenue and balance the $84.6 billion budget by trimming the public sector where needed, although reforming the giant Calpers pension fund is a fight for another time.

Universities, social programs and other expenditures will see cuts in California, although budget plans for the state's pension system still remains up in the air, the San Francisco Chronicle reports.

Top earners in the state's retirement system, including police and fire departments, are putting little into the fund, straining public finances in the process.

"When you consider the burden created by enormous pension costs for police officer and firefighter services across the state, it is the single-most-important economic issue at the state level," the newspaper reports.

"Brown is treating pension reform as a separate fight to prepare for in advance — and he's correct."

The financial meltdown of the last two years took its toll on Calpers, cutting the value of the fund's assets to $160 billion from $260 billion in 2007, according to Reuters

Although that figure is back to $220 billion, the Securities and Exchange Commission wants to know if the state failed to fully disclose the risks attached to the fund's investment activities.

"The SEC has an ongoing look at pension funds in California" because of revelations about the use of placement agents who recommended investment managers, Patricia Macht, a spokeswoman for Calpers, tells The New York Times.