And the residents are fleeing in their droves as a result:
Scott Thatcher and his wife Angela were born in California and love the sun-kissed Golden State. But two months ago they sold their home, packed up their belongings and travelled 1,700 miles with their three sons to start a new life in Texas.
Now the couple have a far bigger home in Fort Worth – and although they earn slightly less, they take home more money thanks to lower taxes in Texas.
As Scott says: ‘You pay a high premium for the Californian lifestyle.’
It seems to be a lifestyle that people feel is no longer worth that price. Lots of people...
For the first time in a glorious 171-year history that attracted thousands seeking fortunes during the 19th Century Gold Rush, gave birth to the global movie industry and unleashed the digital revolution, California has seen its population – currently just under 40 million – decline.
It shrank by 182,083 last year – equivalent to all the citizens living in the coastal idylls of Santa Monica and Santa Barbara combined.
And it's not just taxes. Far from it.
Families and firms are being driven away by the high cost of living, crime fears, hefty taxes, inadequate housing, interfering officials, persistent political failures, red tape, raging wildfires and the squalor of streets littered with homeless drug addicts.
‘It is very sad,’ said Scott. ‘I will always love California but it has changed. It is not what it was when I was a kid, or even five years ago. I could never go back.’
It's very sad - I loved San Francisco when I visited 20 years ago, but even then, the rot was beginning to set in.
Delian Asparouhov is typical of those who turned California into such a powerhouse: a computer geek who attended the top-ranking Massachusetts Institute of Technology, launched a space start-up, was backed by a billionaire and became a venture capitalist in the state.
Yet this month the Bulgarian-born entrepreneur, still ony 27, bought a house in Miami, Florida.
He said: ‘Silicon Valley has a stifling intellectual climate with its mono-culture that only allows one viewpoint to be expressed. It seems to espouse the same socialist values as the Soviet Union.
‘So I am fleeing just like my parents fled a similar system for America when I was a kid.’
Ouch! What do the politicians think about this? Well, you guessed it...
Little wonder senior Democratic figures are on the defensive.
And how!
A senior Democrat faces the media...
One insisted to me that the population exodus was ‘largely a myth’ spread by political enemies.
‘The whole notion that people are fleeing California in droves is false,’ he said.
Numbers don't lie.