So what will the next governor do to help turn things around? A few of the major candidates met on Wednesday in Santa Clara.
By the time the next California governor is elected, California's economic problems won't be over. Fremont's New United Motor Manufacturing, Inc., or NUMMI, plant doesn't close until next spring, adding more than 4,700 people to the jobless numbers. U.C.L.A. is forecasting the state's unemployment rate will stay in double digits into 2011.
Candidates running for governor appeared at a Silicon Valley leadership group event on Wednesday except for Republican Meg Whitman, who had a schedule conflict.
The question to each one was the same: "How would you kick start the state's economy?"
Democratic California Attorney General Jerry Brown said "It's not one thing. It's a lot of business people working hard, it's the federal government pumping that money out, and it's regulating Wall Street in a way that we're not going to see the devastating scams and over leverage that we've been suffering these last few years."
Republican former Congressman Tom Campbell said "I would impose a rule -- no new regulations unless they pass a cost-benefit analysis. And then do a rolling sunset. Any new regulation that you put in that might affect having jobs to offer in California should not last forever, but have a five year review."
Democratic San Francisco Mayor Gavin Newsom said "We don't have our own statewide economic stimulus strategy. We're waiting for handouts from the federal government, and we need to engage in a robust economic development and workforce development strategy, but one of the first places we need to start is dealing with the single biggest disincentive to job growth, and that's payroll taxes."
Republican state insurance commissioner Steve Poizner said "3,000 taxpayers a week pick up and leave the State of California each and every week. No wonder we can't balance the budget when we're driving taxpayers out. So my plan is to broadly cut taxes in the State of California."
Because Republican Meg Whitman, eBay's former CEO, is out of town, her campaign provided a response saying "We cannot begin to rebuild a robust California until we improve the climate for our businesses, large and small. California needs healthy, growing employment, spurred by lower taxes and incentives for investment and entrepreneurship."
Each candidate appears focused on creating jobs and a stronger state economy.
As California and the rest of the country grapple with the recovering economy, one overriding question remains. Will government stay involved, and will it increase regulation? That's a question that all the candidates will need to address.