From the look of it, 2010 is the year California falls into bankruptcy. The Governor's office is now forecasting a $41.8 billion deficit that year. That includes the $15 billion they're already short in the current (2009) fiscal year, and assumes the lottery privatization does not go through. (Arnold wants to lease the lottery out to a private company, then borrow $5 billion against its future revenues.) Standard & Poor lowered the rating on some state-issued bonds, and is preparing to lower the rating of other bonds. This makes it more expensive for the state to borrow money--future bonds will have to pay higher interest.
What this means is, the State of California is grotesquely fucked. Since the economy will not turn around overnight, it's going to get worse before it gets better. The legislature is in no position to pass an updated budget. They're in special session (again) right now, and are not moving. State infrastructure projects (read: highway construction) stops at the end of next week. The word at the high school is the district will have to cut $21 million in spending for the rest of the year. CDF/Cal Fire is closing eight stations locally, as well as staff for one of the two helicopters. The deficit forecast makes the future much, much worse than the present.
Here's what the future looks like: No construction. Grotesquely overcrowded classrooms. Unemployment insurance will run dry. City services will be cut to the bone. Police and fire coverage will be severely curtailed. The next big wildfires will burn out of control for much longer. Health insurance rates will rise, as hospitals will have to recoup the money they won't be getting from the state to cover MediCal and indigent patients. Community college tuition will jump again, and state university tuition will skyrocket.
My advice is this: If you are outside of California, do not take a job here. Do not move here, especially if you have children. If you live here, and have an opportunity to take a job elsewhere, take it, run, and do not look back. Me? I'm going to have to stay. I have a good job with a stable company. In this economy, I'd be running too great a risk if I tried to find something in Illinois, Texas, Washington, or North Carolina. My best option is to batten down the hatches and weather the storm. But if you have the chance to leave, take it.