Nobody overstates their income or profits to the taxman. So the best way to tell whether there is real economic activity going on is to look at tax revenue.
State tax revenue in particular is a good gauge of activity as they tend to have just income taxes, property taxes and sales taxes, which are directly linked to economic activity.
As you can see from the above graph, state tax revenues are at record highs. (note interestingly how dire things were in 2006, which then barely recovered by 2008 to get clobbered again by the Great Financial Crash in 2009).
Even Texas, which saw a drop in 2014 as the oil price crashed, has weathered the storm thanks to a more diversified economy. And revenue is coming in so quickly in California that it looks like Governor Jerry Brown will hand over to his successor a state running a budget surplus, and a rainy day fund of about $13.5 bn, the maximum he is allowed to put into the fund (10% of the budget).
About twenty states are now running surpluses.
I wonder what made New York tax revenue turn down in 2016?
Banking profits were down that year.
Basically New York is dependent on the banking industry, California on tech and Texas on oil. If any of those industries has a downturn, tax revenue turns down.
This is the danger of being odominated by a single industry.
To be fair, California has more than one industry. The tech stuff, the holywood stuff and agriculture.
California still has a large quantity of debt. They'll need to run surpluses for quite a while before most of the debt runs off the books.
As far as I can tell, they've been running a surplus since 2013, and have cleared what Governor Brown called the "wall of debt" - the short-term debt of $35bn that was due within a few years.