Years of corrupt government for one thing. When I moved there in 2002 three city councilmen were under investigation by the FBI. All three got reelected. Two went to jail, and one killed himself.
Also, Californias economy is HUGE, but its boom and bust. In boom times the government spends like crazy, but there's no cuts when the economy busts. So debt is enormous.
Plus thanks to prop 13, property taxes are way below market values. This both drives up housing costs by reducing inventory (you don't move if you are paying super low taxes on your current house but would have to pay 10 times more tax for your new house) and means that the housing boom isn't a boom for tax revenues.