California is broke and will need serious structural changes. As an aside, my company does not do business with firms that have greater than 10% of their ees located in California (NY as well); the business and legal climate is too troublesome. If they elected a governor who truly called on every part of California society to sacrifice and put their legislators to the fire, they'd see reform and a wonderful return to glory. There are just too many beautiful things in California and advantages over other states present in California to stand in the way of talented people going there. If you read through that link, there are things every single group would have to give up: public ees, students, lawyers, enviros, welfare recipients and the general public as well will have to give up some services found nowhere else.
If they did fix these problems, I'd seriously consider moving to Northern California.