Californians’ personal income fell 2.5% in 2009

Californians’ personal income fell in 2009 for the first time since World War II, according to the Bureau of Economic Analysis.

Personal income — which includes all earnings that all people in the state realize from all sources, including wages, dividends, interest income, rents — fell 2.5% to $1.56 trillion, from $1.6 trillion the year before.

Per capita income fell in regions across the state, dropping 3.8% to $42,818 from $44,519 in 2008 in the Los Angeles- Long Beach- Santa Ana metropolitan area, the bureau said Tuesday. Total personal income in the region fell to $551.3 billion from $568.4 billion.

The declines are attributable to job losses in the state, the sagging stock market and weak consumer spending, said H.D. Palmer, a spokesman for the state Finance Department.

“That’s the unholy trinity that helped cause this,” he said.

The region is ranked 43rd in the country in per capita personal income. The Bridgeport- Stamford- Norwalk, Conn., area is ranked first, with a per capita income of $73,720; San Francisco- Oakland-Fremont was second, at $59,696; Naples-Marco Island, Fla. was third, at $54,548.

Personal income fell in each of those regions in 2009 as well.

The Bureau of Economic Analysis said this year that state personal income declined an average of 1.7% in 2009, the largest decline in 60 years.

Falling personal income is another drag on the sluggish economy. Consumers worried about falling incomes spend less money, which hurts retailers. If retailers don’t order more goods, manufacturers, shippers and truck drivers suffer.

It also reduces tax collections. State Controller John Chiang said Tuesday that general fund revenue in May was $91.1 million lower than expected. Personal income tax revenue was down $210 million, or 6.6% lower than expected.

About 1% of the state’s 14.6 million tax returns accounted for 43% of all personal income taxes paid in California in 2008, Palmer said. The stock market troubles of the state’s wealthiest residents has hurt the state’s budget, significantly, he said.

“When the market swoons, those taxpayers sneeze,” he said. “And when they sneeze, the state budget catches a very bad cold.”

alana.semuels@latimes.com