Donald Pittinger wonders when California started to decline:
One of my minor hobbies is assigning dates when places start going to hell. In California's case, I say it was around 1960, just as it was about to overtake New York as the country's most populous state. After that, the Sixties literally and figuratively kicked in, with California bearing the brunt. By 1990 I lost my desire to live there. (Well, if I had gobs of money, I can think of a few places such as Carmel and Santa Barbara that I might find tolerable.)
[But note this gem from the comments: "California will continue to be important as long as Starfleet Headquarters continues to be based in San Francisco."