California ranks last in opportunity due to high cost of living: U.S. News and World Report

According to new state rankings, California ranks dead last in opportunity due to its high cost of living, says the U.S. News and World Report.

USNWR’s report uses cost of living, economic opportunity, and equality to create its opportunity metric. California’s nation-worst cost of living was the main driver of the opportunity ranking, as its economic opportunity and income inequality were both better than more than half of American states’.

The situation with the state budget and corresponding tells part of the story. The 2024-25 state budget that Gov. Gavin Newsom released last week "contains hundreds of spending reductions and other actions to close what he says is a $44.9 billion deficit," according to the Los Angeles Daily News. 

But just two years earlier, Newsom and the state enjoyed a $97.5 billion budget surplus, which resulted from increased revenues during the post-pandemic economic recovery, according to the outlet. 

“California was the birthplace for opportunity where our ancestors came to seek a better life and pursue the California Dream,” said State Sen. Brian Dahle, R-Bieber, who was California Governor Newsom’s opponent in the 2022 general election, to The Center Square. “Housing, electricity, and gas continue to rise, and [Democrats’] solution is to tax, regulate, and mandate no matter the outcome.”

California housing is so expensive that the typical house requires a household income of $224,000, or three times the median household income to afford. Gasoline in California is more expensive than even Hawaii’s, which must be imported across the Pacific Ocean, and proposed taxes could raise gas prices an additional $1.11 per gallon by 2026. The state’s energy is more expensive than any other state’s other than Hawaii, further increasing the cost of living.

America’s largest water district, the Metropolitan Water District of Southern California, which supplies water for 19 million Americans, is raising rates 40% due to revenue losses from high levels of water conservation, putting additional pressure on Californians’ budgets.