California’s total state and local government debt is closer to $2 trillion, not the $1 trillion estimated by the state
The choices California’s legislators and pension boards make over the next few years will determine whether a truly devastating financial and economic crisis materializes.
"California’s total state and local government debt now stands at almost $1.6 trillion, or about half the state’s GDP. That isn’t an alarming ratio when compared to the national debt, which has now soared to 128 percent of U.S. GDP with no end in sight. But Californians carry this $1.6 trillion state and local debt ($40,000 per capita) in addition to their share of the national debt (about $90,000 per capita).” — The California Policy Center (Feb 2022).
The gross national debt per taxpayer is $245,000 so the per capita data are misleading. Why, because the bottom 50% or so pay no federal taxes when offset by government transfer payments. It's worse today given this is dated information. Market returns are lower, by a about 20%, so are bonds.
“California’s true debt overhang is not the officially recognized $1.0 trillion, or even the $1.6 trillion (or more) that accrues if pension analysts use more prudent financial assumptions when calculating the unfunded liability. Taking into account the cost for the public infrastructure that Californians deserve, and that should have been built by now, it is reasonable to assume California’s state and local public debt exceeds $2.0 trillion."— The California Policy Center (Feb 2022)
”California’s total state and local government debt, given the size of its economy, may still not be unmanageable at the moment. But the choices California’s legislators and pension boards make over the next few years will determine whether a truly devastating financial and economic crisis materializes or, instead, government agency balance sheets acquire the resilience necessary to cope with the economic turbulence that could lie just ahead.” — The California Policy Center (Feb 2022)
The reason the state's budget debt is likely over $2 trillion is because it doesn't include the true costs of the boondoggle high speed train that is massively over budget.
The governor's previous revenue projections reflected an illusionary (asset bubble) surplus when he returned cash to voters right before the mid-term elections. The budget that projected the surplus now has been revised to a deficit, which is likely understated given the rosy scenarios that do not include a recession next year.
As more people and businesses move out of the state, well, it's easy to make the case the deficit and budget liabilities will get worse. The size of the government in CA is bloated and costs too high. Higher costs and taxes will result in even more people and businesses leaving the state.