I think it's clear that the problem with California is not the taxation rate (which after all at 10.5% is not much higher than the national average of 9.7% and

I think it's clear that the problem with California is not the taxation rate (which after all at 10.5% is not much higher than the national average of 9.7% and ranks only 6th) but rather that the entire state government is incredibly broken. A big portion of the state's revenues are constitutionally mandated to go to certain programs via the ridiculously easy referendum process. Meanwhile, Proposition 13 requires a 2/3rds majority vote to pass any sort of budget, and a hardened radical element in the Assembly would rather see the state go down in flames than raise taxes (even when coupled with spending cuts). I think the very short term limits (3 terms) for assembly members feeds this tendency because they don't have enough time to get good at legislating and compromising before being kicked out of office. At the same time the (vast majority) Democrats in the assembly don't want massive spending cuts -- but you must admit they have the majority! A 2/3rd requirement to pass a budget is incredibly undemocratic. The result is unrestricted borrowing and inevitable collapse.