California middle-class families hit with $26K cost-of-living penalty: report
40% of Californians are considering moving out of state, according to the Transparency Foundation
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Middle-class families in California are getting slammed with an "unreasonable" cost-of-living-penalty for simply residing in the Golden State, according to a new report.
According to data from the Transparency Foundation's Cost of California Report, a typical middle-class family of three earning $130,000 a year faces a financial burden of more than $26,000 because of higher living expenses.
The nonpartisan group's report compares costs such as housing, utilities, food, gas, child care and health care, in every major household budget category between California and national averages.
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The foundation's data showed that on every household budget, the cost to live in California is exponentially higher compared with the national average, according to Transparency Foundation Chairman Carl DeMaio, who laid blame on "costly mandates and bad policies."
Homes in San Francisco on Saturday, Nov. 4, 2023 (Michaela Vatcheva/Bloomberg via Getty Images / Getty Images)
For a family earning $130,000 annually and paying average income taxes of $42,813, they are left with a total net income of $7,265.58 a month.
The group estimated that the total monthly cost of living in California is just over $9,200. Meanwhile, the total monthly cost of living if paying national averages would be $7,034.87, the report said.
Not only do middle-class families face a penalty of $26,478.72 versus if they simply paid the national average costs in each category, but the report said they will also end up running an annual deficit of $23,710.20.
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However, if costs were in line with the national average in each category, those families would instead have an annual surplus of $2,768.52, according to the report.
About 40% of people in California admitted that they are even considering moving out of the state. A majority of those people, 67%, cited the exorbitant living fees as the reason, according to the report.
A real estate agent waits for prospective buyers during an open house at a home in San Francisco on Saturday, Nov. 4, 2023. (Michaela Vatcheva/Bloomberg via Getty Images / Getty Images)
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As a result, DeMaio is calling on residents to demand a true cost-benefit analysis on every state law, regulation and mandate that is not imposed in other states.
Here are the costs for California versus the national average in each category, according to the Transparency Foundation:
- Housing: Homeowners pay 32% more in California and renters pay 47% more
- Gas: 25% more on average
- Food: Grocery bills are 4% higher
- Water: 47% higher
- Health care services: 42% higher
- State and local taxes: 14% higher
- Child care: 34% higher
- Electricity: 48% higher
- Car insurance: 22% higher
- Health insurance: 3% less
- Homeowner's insurance: 68% less