In 2023, the exodus of residents from California continued, with many opting to relocate to states such as Arizona, Texas, Florida, and North Carolina.
The trend of Californians leaving their home state had already been observed in previous years. In 2020-2021, approximately 410,000 residents departed, followed by an additional 340,000 between 2021-2022. This outmigration persisted in 2023, coinciding with California’s mounting financial challenges, including a $38 billion deficit for the year and a projected $68 billion deficit for 2024-2025.
An August 2023 report from moving company Pods highlighted that Los Angeles was the top city from which residents were moving out, followed by the San Francisco/Bay Area, maintaining their positions from the previous year. Other California cities like Stockton-Modesto and Santa Barbara also featured on the list of cities witnessing significant outmigration.
Conversely, the Carolinas (North and South), Florida, and Texas attracted the highest number of incoming residents. Wilmington, North Carolina, and Myrtle Beach, South Carolina, led the list, with other North Carolina cities like Charlotte, Asheville, and Raleigh also ranking among the top 20 destinations. Greenville – Spartanburg, South Carolina, secured the tenth spot.
In Texas, Houston, Dallas-Fort Worth, and San Antonio emerged as the top destinations for new residents, with Phoenix, Arizona, also attracting Californians seeking a change of scenery.
According to a report by the San Francisco Chronicle, over 175,000 California residents relocated to Arizona (74,000) and Texas (102,000) in 2021-2022, although 69,000 individuals moved in the opposite direction, resulting in a net migration of -106,000 for California. This trend of net-negative migration to neighboring states has persisted under Governor Gavin Newsom’s leadership, with one in every five people moving to Arizona during 2017-2021 coming from California.
Florida, often regarded as a popular destination, saw cities like Sarasota, Orlando, Ocala, Jacksonville, Tampa Bay, and Melbourne included in the list of top-20 destinations for newcomers in 2023. Additionally, more than 50,000 Californians migrated to Florida’s east coast in 2021-2022.
California’s woes extended to its educated population, as over 500,000 residents with at least a bachelor’s degree left the state between 2021-2022. While around 350,000 college graduates moved in during the same period, California still experienced a net loss of 150,000 highly educated individuals.
This outmigration had a notable impact on the state’s finances, leading to a 25% decline in personal income tax collection in 2023. The resulting deficit, projected at $68 billion, was attributed to a combination of overspending and the ongoing population shift.
The state’s own report indicated that revenues fell short of projections by $58 billion, with an anticipated deficit of approximately $14 billion. In essence, California had budgeted to spend more money than it could realistically generate, contributing to its ballooning debt. Over a single fiscal year, the state’s debt soared from -$5.1 billion to -$38 billion. Projections for fiscal year 2024-2025 suggested that this deficit would nearly double to -$67.59 billion, although forecasters expected a return to positive revenue growth in 2024-25 and beyond..”
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