The California unemployment rate recently dropped to 10.1%. It is one of only three states with unemployment still in double digits (Nevada and Rhode Island are the other two). Mass unemployment drained the state unemployment insurance trust fund in 2009 and it has never recovered.
California has been borrowing from the federal government to pay unemployment claims since 2009, and was supposed to start paying interest on the loans back in 2010. The interest payments were initially deferred again, but I'm not sure of the current status.
While the trust fund balance appears to have bottomed, it is still $9.5 billion in the red. California's state budget is $91 billion, so the trust fund liability is over a 10% deficit by itself. The projected general fund deficit for the current year is only $1.9 billion, so all California has to do is turn that into a surplus for 5 years straight (assuming no interest) to get the trust fund back to zero.
Is California Recovering Faster?
California: Unemployment Rate falls to 10.1% in October, Payroll jobs increase 45,800