Jerry Brown has been sworn in as California's governor, returning to a job he held nearly three decades ago.
Mr Brown has pledged a 'tough budget' to turn around one of the most financially strapped US states.
In keeping with his message of austerity and painful choices, the veteran Democrat, who was the state's governor for two terms from 1975 to 1983, served hot dogs at his inaugural lunch after taking over from Republican Arnold Schwarzenegger.
Inheriting a budget gap estimated at nearly $28bn through mid-2012, Mr Brown has called for more spending cuts to balance the books in California, the state with the largest population and worst credit rating.
He is also widely expected to push for a special election that would ask voters to extend temporary tax increases to help balance the state's books.
Mr Brown must present the Democratic-controlled state legislature with a budget plan for the fiscal year beginning in July within a week. He said the plan he would present would be painful.
'At this stage in my life, I have not come here to embrace delay and denial,' Mr Brown told an audience in Sacramento, the state capital, after taking the oath of office.
He also pledged to make environmental issues a top priority and said he intended to meet his goal of bringing 20,000 megawatts of energy from renewable sources online by 2020.
State Democrats recently rejected Mr Schwarzenegger's plan to close a roughly $6bn shortfall in the current fiscal budget. They said they would wait to work on the budget with Mr Brown.
Meanwhile, Mr Schwarzenegger used his last day in office to grant clemency to a woman who was 16 when she ambushed and killed her former pimp in a Southern California motel room.
