Since July 2007 (before the recession began), more than one million jobs have been lost. From July 2007 to December, 2009, total nonfarm employment (seasonally adjusted) in California dropped from 15.2 million to 14.1 million, a loss of 1.05 million jobs.1
Since July 2007, unemployment in California has more than doubled. The civilian unemployment rate (seasonally adjusted) went from 5.3% to 12.4%. In December, 2009, there were 2.25 unemployed Californians (seasonally adjusted) compared to 964,000 unemployed Californians in July 2007. In July 2007, California’s unemployment rate of 5.3% was only 0.6% above the national average of 4.7%. In December 2009, the gap was four times as great, with California’s rate at 12.4% compared with a national rate of 10.0%.2
In December 2009, California had the fifth highest unemployment rate in the country when compared to the other states and the District of Columbia.3
The underemployment rate in California – a broader measure which captures, in addition to the jobless, both people who could get only part-time work as well as those who want jobs but were too discouraged to look for employment – hit 21.1% in December 2009.4
Manufacturing employment in California has dropped by more than 190,000 jobs – or 1/8 of the total manufacturing jobs that existed in July 2007. Total manufacturing employment fell from 1.47 million in July 2007 to 1.27 million in December, 2009.5
California exports have fallen by nearly $25 billion. In 2008, cumulative exports through September were $111.3 billion. In 2009, cumulative exports through September were only been $86.5 billion.6
Home prices in California have been cut in half. The median home price went from $560,300 in 2007 to a projected $271,000 in 2009.7
Residential housing permits in California have plummeted from an annual rate of 150,000 residential units in January 2007 to only 39,000 in December, 2009.8 As a result, construction employment has dropped by about a third, from 913,600 in January 2007 to 606,500 in December, 2009.9
In 2008 and 2009, California faced its largest budget gap in history, requiring the adoption of $60 billion in new taxes, fees, deferrals, and spending cuts.10 The final budget actions raised taxes by $12.5 billion, and raised another $8 billion through higher fees, borrowing, and accounting tricks.
In February 2009, California upped its base sales tax rate temporarily to 8.25%, the highest in the nation.11 Including local rates, the total sales tax now is as high as 10.25% in some California cities.
In February 2009, California also temporarily created the fourth highest personal income tax rate in the country with across-the-board increases to personal income tax rates.12 California’s highest rate of 10.55% is now only exceeded by recently-adopted increases in New Jersey (10.75%), Hawaii (11%), and Oregon (11%).
The Vehicle License Fee was nearly doubled, from 0.65% to 1.15%. As a result of this temporary action, California motorists will be paying an additional $2 billion each year through 2011.
In July 2009, California began paying its bills in IOUs, only the second time it has done so since the Great Depression. The State Controller has threatened a reprise of this for 2010, unless the Legislature makes certain, immediate spending cuts or revenue increases.13
According to the Department of Finance, “Without corrective action, California is projected to face a budget gap of $19.9 billion in fiscal year 2010‑11. This figure is comprised of a current year shortfall of $6.6 billion, a budget year shortfall of $12.3 billion, and a modest reserve of $1 billion.” The deficit increased from its previous projected level because, according to DOF, “revenue estimates are $3.4 billion lower, federal and state court decisions have reduced or eliminated budget solutions adopted in previous years and imposed costs totaling $4.9 billion, erosions of previous solutions result in $2.3 billion of the budget gap, and population and caseload growth adds $1.4 billion in costs.”14
Total state debt has grown to more than $200 billion, including $100 billion in unfunded retirement obligations to state employees.15 This $200 billion is likely to grow another $80-90 billion as a result of borrowing in the current budget revisions, another $30 billion estimated by the LAO that will be needed to cover state employee pension investment losses, and another $53 billion in general obligation bonds that have been authorized and are waiting to be sold by the State Treasurer.