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California living costs typical middle-class family an extra $26,479 per year

Study compared costs in major household budget categories between national and California averages.

Published: November 10, 2023 11:32pm

(The Center Square) -

According to a new study, the cost of living in California imposes an extra $26,479 each year on a typical middle-class family.

“Our methodology calculates that a typical middle-class family of three earning $130,000 a year faces a “Cost of California” penalty of $26,478.72 versus if they simply paid the national average of cost in each category,” wrote the Transparency Foundation in their report.

The study compared costs in major household budget categories between national and California averages, such as housing, taxes and transportation. In California, renters pay 47% more than the national average, while homeowners pay 32% more, healthcare services cost 42% more, and state and local taxes are 14% higher, among others.

There were only two categories Californians experienced any savings over the national average were 3% in health insurance, which is subsidized by higher taxes paid to the state government, and homeowner’s insurance, which is 68% cheaper in California because of government-run rate change limits that are driving insurers out of the state as claims exceed insurance premiums.

Some California legislators view the report as an opportunity to highlight the need to reduce regulations and make other efforts to make the cost of doing business — and living — lower in California.

“With irresponsible policies and shameless tax increases, the majority party has made this state a very difficult place to raise a family or pursue your dreams,” said State Sen. Roger Niello, R–Fair Oaks, to The Center Square. “A very important observation of this report is that politicians point blame at others when they are really the ones to blame. Better policy and budget decisions that put Californians first need to be implemented soon before Californians are priced out of this state.”

A recent poll from the Public Policy Institute of California found 71% of Californians believe their children will be financially worse off than they are, suggesting many believe California’s economic prospects may be fading off into the sunset.

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