Dobbs: Exodus from California

From transcript of show aired January 19, 2009

DOBBS: The state of California is facing a mass exodus. The combination of the Golden State's budgetary mess, its soaring unemployment, illegal immigration, and tough business climate has many of its residents saying enough is enough. They're moving out. Casey Wian has our story from Los Angeles.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: This won't be your last visit to California.

UNIDENTIFIED MALE: You'll be back.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Perhaps. California's image has been tarnished by a crippling economic crisis that has people fleeing. State government is barely functioning. Instead of singing California's praises, Governor Schwarzenegger's tune has changed.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: We're heading toward a financial Armageddon.

WIAN: Here's why, California's unemployment rate has soared to 8.4 percent. Since 2006 job losses have grown in 23 of 24 consecutive months. The number of unemployed has nearly doubled, exceeding 1.5 million. More jobs are at risk from the state's $40-plus billion budget deficit.

For months the governor and state lawmakers have been unable to reach a budget deal. Now they are threatening to issue IOUs instead of tax refund checks next month. From July of 2007 through July of last year 135,000 residents moved out of California, more than any other state. And economic conditions have worsened since then.

UNIDENTIFIED MALE: The wagons are headed east. Unfortunately we have people fleeing the state because they made regulations so much; they've raised taxes so much we've seen just an out migration of folks moving to states where they can make a living for their families a little easier. And this is a dangerous spot we're in and what I've been telling people is California is under water and if we don't do something about it we're going to fall off into the ocean.

WIAN: Climbing the prospects for recovery California ranks 49th out of 50 states in business survivability according to the Small Business and Entrepreneurship Council. Another recent study found 23 percent of Californians are illiterate, the nation's highest rate, one reason high levels of both legal and illegal immigration. In 2008, while 135,000 Californians left the state, 242,000 foreign immigrants arrived.

(END VIDEOTAPE)

WIAN: Congressman Nunez (ph) like many Californians is fed up with the state's elected leadership. He's proposing a ballot initiative that would dismantle the state legislature and replace it with a part-time nonpartisan citizen legislature. He also wants a taxpayer bill of rights to control spending, the growth of state government, and end budget gridlock. Lou.

DOBBS: Well isn't that what a government is for?

WIAN: You would think so, but it's certainly not functioning the way it's supposed to here in California and you know the sharks are just in a feeding frenzy. The state of Arizona just announced late last week that they are forming a commission to go after businesses in California to get them to move to Arizona.

We've also had some news out that the state of California is going to cut more than 2,000 positions from the University of California system. So that doesn't bode well for the future, Lou.

DOBBS: Well just to get this clear, 135,000 residents are leaving.

WIAN: Right.

DOBBS: And 242,000 immigrants -- I presume that's legal or illegal, I don't know which, coming in. Are we saying that it's a net loss of 135 or are we saying it's a net gain of 107?

WIAN: It's a net gain in terms of the people who are moving in and the people who are moving out. Of course the people who are moving in are lower educated. They have trouble with the English language often.

They have more children. They present more costs to the state of California than those who are leaving the state. And the other thing we should point out is that these numbers are only through July of last year. The economic conditions have deteriorated far further since then. So I imagine when the new numbers come out in a few months we're going to see that the exodus has accelerated, Lou.

DOBBS: All right Casey thank you very much. Casey Wian.

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