Gov. Arnold Schwarzenegger assessed the state of the state in his annual address to the Legislature on Thursday, and I sure wouldn't argue with his conclusion that the condition of California's government is dire.

Yet California is a state of 38 million people, and the government, while it dominates the news and affects all of our lives, is not the state. The state is out here in our homes, our jobs, our schools, our towns and cities. And that California, while troubled, is probably doing a lot better than the government.

Over the past several years I have been tracking a handful of statistical measures that provide a snapshot of the quality of life in California. The dozen indicators I have chosen are not comprehensive, but they give us a way to gauge, over time and outside the hyperventilated world of partisan politics, how our state is doing.

This year, for the first time since I began my index, the indicators are turning negative. But not across the board. At least not yet. Some of the data comes with a time lag: We won't know what income growth did in 2008 for many months, for example, so my index uses numbers from 2007. In other cases, though, you might be surprised to see how well we are doing. And if you step back from the crisis atmosphere of the moment, in almost every area California is still doing better than it was 10 years ago.

First, the bad news. While incomes were up in 2007, more recent indicators show that 2008 likely saw the end of that trend. The number of jobs declined last year, unemployment and poverty rose, and the number of people on welfare assistance grew for the first time in several years. Exports through California ports also slowed. Home ownership, not surprisingly, began to decline in 2007 and a bigger drop seems likely when the numbers from 2008 come in. Even air quality got worse.

The biggest bright spot was education. California students continued to make slow but steady progress mastering English and math, and our public systems of higher education, despite tighter budgets, are awarding more degrees every year. Another surprise: the number of people with health insurance increased in 2007. Finally, violent crime rates, after a brief uptick in 2006, declined again, continuing one of the great and least-known good-news stories of the past generation.

Here is the detail:

• INCOME. Personal income per capita climbed 4.3 percent in 2007 to $41,580. The increase was 1.7 percent after inflation. Since 1997, per capita income has climbed about 27 percent after inflation.

Median family income increased by 8.8 percent in 2007 to $67,484. That was an increase of 6.1 percent after inflation. Since 1997, median family income has grown by 22 percent after inflation.

• JOBS. The number of civilian jobs in California declined by about 220,000 to just over 17 million in 2008, according to preliminary figures. Unemployment rose from 5.7 percent to 8.4 percent.

Since 1998, California employers have created a net of about 1.7 million civilian jobs.

• POVERTY. California's poverty rate moved upward in 2007 from 12.2 percent to 12.7 percent. There were about 4.59 million people in poverty, up about 160,000 from the year before. The official poverty level is an income of about $21,400 for a family of four.

• WELFARE. The number of families dependent on California's main public assistance program – CalWORKS – hit a modern low in June 2007, but it began rising shortly after, and caseloads grew by 21,000 over the next year to about 477,000 families.

That still was only a little more than half the number that were in welfare in 1995 before federal reforms imposing time limits and work or education requirements kicked in. The state has also made it easier for people to get off welfare by offering more child care, health benefits and policies that give people an incentive to work by allowing them to transition from assistance to a self-supporting situation.

• HEALTH INSURANCE. The number of people covered by health insurance for the entire year increased in 2007 by 265,000 to about 29.7 million. Only about 41,000 of those people, however, got private insurance. The rest were part of government health care expansions. About 82 percent of Californians under age 65 have some form of insurance coverage.