(The Center Square) – California experienced the highest outmigration of any state in the nation, a major threat to the state’s fiscal future as it faces a $68 billion budget deficit and declining tax revenues.

New Census Bureau data says a net total of 338,371 Americans left the Golden State in 2023 compared to those moving in from other states, eating into tax revenues and representing a 2% increase in outmigration over the prior year. The state already faces a $26 billion revenue shortfall for the current 2023-2024 fiscal year, partially due to what the state legislative analyst’s office says is a recession that started in March of 2023.

Though California had the highest outmigration, New York came first overall for population decline, as California brought in twice the international immigrants New York did and experienced more than double the births. In proportional terms, New York, which has half the population California does, had two-thirds California’s level of outmigration, leading to the state’s higher overall decline in population.

S&P, which recently reduced its outlook for California’s general obligation bonds from “positive” to “stable,” also noted in a separate report that outmigration accelerated by cost increases could, “absent the state’s ability to adapt by cutting expenditures…lead to credit quality deterioration.”

Polling from the Public Policy Institute of California has found that the state’s housing costs — the primary driver of the state’s cost of living — make 45% of residents consider moving out of the state. California maintains a 4.5 million home housing shortage as regulations limit the production of housing.

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