I'm speaking as a product of UCLA, so I may be a bit biased. I was there from 2000 - 2004. I lived on campus and it was the best experience of my life. It made me the person I am today and I couldn't be happier.
There are differences among the UC system and definitely in State University. Among the High Schools, everyone knows that you only apply to the State University if you can't get into the UC system or they have the program that you really want. This was something that was discussed heavily during my junior and senior year of High School. In the UC system, there are several "safety" school in terms on which one will accept you. Truth be told, the UC system has an unofficial or may be an official ranking system. Berkeley/UCLA tend to flip flop, San Diego, but this one has a several "colleges" that may or may not accept you. It's a bit complicated. There's also Santa Barbara, Irvine, Davis, then Santa Cruz and then Riverside. And well, there's also San Francisco, but that's only for graduate students. This is how it was looked at before and it still sort of is now when I am asked by my nieces/nephew and cousins.
Also note that the cost will be more if you are not an in-state student. There's a significant surcharge for an out-of-state. For a being a resident of California, it's definitely cheaper compared to it. As far as California being "bankrupt" I highly doubt it will affect the UC system to the point it will fall apart. These Universities are necessary for California.