LA billionaire explains how to fix California's 'problems'

While many are fleeing the West Coast for places like Texas and Florida, one Los Angeles billionaire is weathering the storm, arguing things in California could turn around.

"I think California is the greatest state in the union. So I am partial to California and I'm certainly partial to Los Angeles. But we do have problems. You've got crime problems. We have a growing homeless problem on the street," Caruso founder and Executive Chairman Rick Caruso said.

"I think it's all fixable" he affirmed. 

On "Cavuto: Coast to Coast" Wednesday, Caruso outlined what he believes is the "issue" in California.

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"The issue in California isn't as much taxes, and clearly people leave California because of taxes. I think the issue is people are willing to pay the taxes as long as they're living in a livable, safe community and they feel like they're getting the benefit of paying higher taxes," he explained. 

"When you're living in some areas of California that are suffering from the homeless issue and businesses declining and tough to operate a business, and certainly you can argue overregulated, some people are choosing to leave."

While other states have seen population decreases, California’s decline hovered over 0.3%, a first for the state. 

California lost 117,552 people between Jan. 1, 2021 and Jan. 1, 2022, according to the state's Department of Finance, bringing its population back to where it was in 2016. 

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One component experts believe is behind some of the population movement is the state's high taxes.

California’s state income tax currently sits at 13.3% with the top 1% of Californians paying roughly half of the state’s bill. 

Caruso outlined that issues beyond taxes are to blame for the exodus, citing homeless crises in big cities, rising crime and even a heavily regulated business environment. He also noted that the accountability for the issues falls first to local officials rather than California Gov. Gavin Newsom.

"I think Governor Newsom, given what he's dealing with, is doing a really good job. I think the issue of the homelessness and the crime is at the local level, and you really can't pin that on the governor. You've got to look at the mayors, the city councils, the supervisors that are in charge of reducing crime and homelessness," he said. 

Widespread homelessness has been an issue plaguing numerous big cities in California, including San Francisco and Los Angeles. 

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California's homeless population accounts for nearly a third of the nation's homeless, according to data from the Benioff Homelessness and Housing Initiative (BHHI) at the University of California, San Francisco.

"It's mercurial, what's happening in a lot of these cities. It's a tale of two cities, of two areas within geographic areas of L.A. County," Caruso explained. 

"You have parts of L.A. County that are very clean and very safe and very few homeless. And you have other parts, especially in the city of Los Angeles, where the numbers just came out, were up 10% on the homeless count on the streets. That can be fixed, but it's got to be fixed at the city level. And we got to hold our city officials, whether it's San Francisco or Los Angeles and Sacramento, accountable for that."

In addition to homelessness, Caruso mentioned crime is another issue plaguing California and causing people to leave. 

"If you give people permission to commit a crime, whatever that crime may be, you set the tone that it's accepted. And so you've got to hold everybody accountable for breaking the law. And the accountability has to be fair, no doubt about it, but you can't just turn a blind eye to some levels of crime," he said. 

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Violent crime in San Francisco soared as much as 80% earlier this year and was evidenced by a recent poll that showed only 17% of riders on the city's public transit system feel safe and 73% wanted to see more police on the trains. Los Angeles has also seen an increase in many categories of crime in recent years, including a 24% spike in serious crimes such as aggravated assault, murder and rape on public trains and buses in 2022.

"We've got to reverse that," Caruso urged. "We've got to hire more officers, and we've got to enforce laws. These are just basic things. When I was the police commissioner, along with Bill Bratton, we turned crime around to levels not seen since 1950. And we can do that again. It can be done. It's going to take good leadership. And leadership does matter."

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Caruso expressed confidence in California's future, saying the state is not "beyond repair." He noted that leadership is critical to the Golden State's turnaround.

"I don't think it's beyond repair, but I do think this. I think the leadership, the elected officials need to make smart and at times tough decisions that may risk their political careers, but make decisions that actually are benefiting the people they serve."

FOX Business' Alicia Warren and Fox News' Aaron Kliegman, Andrew Mark Miller and Greg Wehner contributed to this report.