The Department of Finance study shows California's white population is declining at a much faster rate than previously thought, paving the way for Latinos to surpass whites as the largest racial demographic in 2016.
"We actually think that Hispanics will be the majority or over 50 percent of the population in the year 2042," Department of Finance Chief Demographer Mary Heim said.
In 2008, California's white population declined by half a million from 2000 to 15.5 million. Over the same period, the number of Hispanics grew by more than 3 million to just over 14 million.
"For the first time, for the white population, we're seeing natural decrease; the number of deaths to whites is higher than the number of births to whites," Heim said.
The average age for whites in California is 44; for Latinos, it's much younger -- 28.
UC Davis Chicano Studies Chairwoman Adela De La Torre thinks the controversial Arizona law was partly spurred by the trend of population growth among Latinos here and nationwide.
"I think the backlash in Arizona has largely to do with not just the issue of the border, but with the concern that non-Hispanic whites recognize that they will soon not be the majority," De La Torre said.
De La Torre warns state leaders have to address issues that come with a rising Latino population -- the dropout rate is higher and voter participation is lower within this group.
"The net result is a lot of our policy today doesn't include the voices of the new Latino majority. So we're going to have policies that are going to be disconnected to the needs of a very large constituency," she said.
Another contributing factor to the decline of whites in the population was the real estate market. More whites moved out of California to find cheaper housing than the number that moved into the state.