Mr Brown, a Democrat who also served as California's governor from 1975 to 1983, will be only the second person to lead the state for three terms.

He said the year ahead would "demand courage and sacrifice" if California was to overcome its fiscal problems.

Among his first tasks will be to present a new budget plan.

The state faces a US$28bn (£18bn) budget shortfall over the next 18 months.

Voters may be asked to agree to the extension of temporary taxes that were brought in 2009 and are due to expire in July.

Mr Brown, 72, will need the backing of some Republicans in the state legislature if he is to put any tax measures to voters.

Speaking at his inauguration ceremony in the state capital, Sacramento, Mr Brown urged the state's politicians to "rise above ideology" to take the action needed for the good of the state.

While vowing to tackle waste in government, Mr Brown pointed out that government spending on services would also have to be scrutinised.

He promised to be truthful about the state's finances, saying there would be "no more smoke and mirrors", to put any proposed tax rises before voters and to return more powers to local bodies.

Mr Brown defeated billionaire Republican candidate Meg Whitman in the November US mid-term elections to win office.