California has experienced significant population loss in recent years — but is a decline in residents to blame for the state’s budget deficit?
Fox Business host Stuart Varney of “Varney & Co.” recently made the connection between an increase in the number of people leaving California and the estimated $22.5 billion deficit leaders must address.
The California Senate Republican Caucus then amplified Varney’s message on Twitter, saying: “The CA exodus is costing the formerly “Golden State” billions of dollars — $22 BILLION to be exact.”
Claim: Varney said more than 500,000 people left California from July 2020 and July 2022, which is a “real danger to the state because those who leave, take their money with them.”
“Two thirds of California’s income tax revenue come from people making over $200,000 a year, and those are the people who are leaving,” Varney said. “The exodus is costing the formerly golden state billions of dollars: the deficit is over $22 billion and rising rapidly.”
Rating: False
Details: It’s true that many Californians have left the state during the past 20 years. Varney’s 500,000 figure comes from U.S. Census Bureau state population totals released in early 2023.
The Public Policy Institute of California last year reported more people have left the state than moved in every year since since 2001.
However, Varney is wrong about who exactly is leaving California.
PPIC reports most who have moved away during the past 10 years are low- and middle-income earners struggling with the state’s high cost of living. The majority of Californians leaving the state cite housing, job or family as their reasons for moving.
Those who move to California and remain are higher-income earners, PPIC reports.
Varney’s claim that the deficit is caused by Californians moving away is also incorrect. The Legislative Analyst’s Office in November suggested the budget deficit is caused by a post-COVID-19 pandemic inflationary economy and the Federal Reserve’s attempts to tamp it down.
To control consumer prices, the Federal Reserve increased interest rates in 2022. This caused a decline in home and car sales, as well as stock prices.
The LAO blamed “notably weaker” 2022 income tax payments on these lower stock prices.
Jacqui Nguyen, a Republican caucus spokeswoman, said Senate Republicans are “committed to legislation that cuts costs so fewer families do not have to make the choice to flee this state.”
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