No, California is much worst. Our state is on the brink of insolvency and companies are moving out to Texas or Arizona because of higher taxes. But, we raise more taxes in order to make up for the lost revenue, and it becomes an endless cycle due to the structural flaws within California. My point: just because Californians study in U of A, does not mean that we won't stay. California is becoming depressing, and I would stay in AZ if given the chance to go to U of A.
Honestly, I wouldn't worry about Californians flooding Arizona Medical schools. Diversity is always a good thing. I love OOS students in the UC system because they are such an asset since they bring so many different things to the table. Our grad students are from all over this country and the world, and their unique perspectives really add to the mix. It's a good thing ultimately. I think that it is much more important to recruit quality applicants who genuinely want to serve. It has less to do what your address says.
Point and case where closing yourself off the the rest of the world is bad: China when they closed their borders to foreigners. The rest of the world progressed and it ultimately hurt China. After they opened up their doors and had a few revolutions here and there, look at where they are now. U o A isn't as closed off as China was, but you get what I mean. Increasing your applicant pool is a good thing. You are able to see so many new things when you take your blinders off. U o A is doing the right thing, but for the wrong reasons. But at least they are doing the right thing. And there are many other solutions to attract physicians to AZ. You just have to be creative and think outside of the box, which is a skill I think many of physicians lack.