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Calif. losing golden allure

Exodus goes on as jobs dry up

Cindy Reilly set the dinner table for her children, Isabella, 7, (left) and Sierra, 4, and her husband Mike in their home in Nipomo, Calif. The family has decided to escape California's high cost of living by moving to Colorado next month. Cindy Reilly set the dinner table for her children, Isabella, 7, (left) and Sierra, 4, and her husband Mike in their home in Nipomo, Calif. The family has decided to escape California's high cost of living by moving to Colorado next month. (Eric Parsons/ Associated Press)
By Michael R. Blood
Associated Press / January 13, 2009
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LOS ANGELES - Mike Reilly spent his lifetime chasing the California dream. This year he's going to look for it in Colorado.

With a house purchase near Denver in the works, the 38-year-old engineering contractor plans to move his family 1,200 miles away from his home state's lemon groves, sunshine, and beaches. For him, years of rising taxes, dead-end schools, unchecked illegal immigration, and clogged traffic have robbed the Golden State of its allure.

Is there something left of the California dream?

"If you are a Hollywood actor," Reilly said, "but not for us."

Since the days of the Gold Rush, California has represented the Promised Land, an image celebrated in the songs of the Beach Boys and embodied by Silicon Valley's instant millionaires and the young men and women who achieve stardom in Hollywood.

But for many California families last year, tomorrow started somewhere else.

The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period - more than any other state, according to census estimates. That is about equal to the population of Syracuse, N.Y.

The state with the next-highest net loss through migration between states was New York, which lost just over 126,000 residents.

California's loss is extremely small in a state of 38 million. And, in fact, the state's population continues to increase overall because of births and immigration, legal and illegal. But it is the fourth consecutive year that more residents decamped from California for other states than arrived here from within the United States

A losing streak that long hasn't happened in California since the recession of the early 1990s, when departures outstripped arrivals from other states by 362,000 in 1994 alone.

In part because of the boom in population in other Western states, California could lose a congressional seat for the first time in its history.

Why are so many looking for an exit?

Among other things: California's unemployment rate hit 8.4 percent in November, the third-highest in the nation, and it is expected to get worse. A record 236,000 foreclosures are projected for 2008, more than the prior nine years combined, according to research firm MDA DataQuick. Personal income was about flat last year.

With state government facing a $41.6 billion budget hole over 18 months, residents are bracing for higher taxes, cuts in education, and postponed tax rebates. A multibillion-dollar plan to remake downtown Los Angeles has stalled, and office vacancy rates there and in San Diego and San Jose surpass the 10.2 percent national average.

Median housing prices have nose-dived one-third from a 2006 peak, but many homes are still out of reach for middle-class families. Some small towns are on the brink of bankruptcy. Normally recession-proof Hollywood has been hit by layoffs.

California's obituary has been written before - "California: The Endangered Dream" was the title of a 1991 Time magazine cover story. The Golden State and its huge economy - by itself, the eighth-largest in the world - have shown resilience, weathering the aerospace bust, the dot-com crash, and an energy crunch in recent years.

But this time, the news keeps getting worse.

A state board halted lending for about 2,000 public works projects in California worth more than $16 billion because the state could not afford them. A report by Senator Barbara Boxer, Democrat of California, last month said the state lost 100,000 jobs in the last year and the erosion of home prices eliminated over $1 trillion in wealth.

"I don't think the California dream, per se, is over. It has become and will continue to become grittier," said New America Foundation senior fellow Gregory Rodriguez. "Now, perhaps, we have to reassess the California of our imagination."

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