California Ranks Last in Opportunity Due to High Cost of Living, Says US News and World Report

California’s High Cost of Living Ranks State Dead Last in Opportunity

In a recent report by the U.S. News and World Report, California has been ranked dead last in opportunity due to its high cost of living. The report takes into account factors such as cost of living, economic opportunity, and equality to create its opportunity metric, with California’s nation-worst cost of living being the main driver of the ranking.

The state’s economic opportunity and income inequality were actually better than more than half of American states, but the high cost of living overshadowed these factors. The situation with the state budget further highlights the challenges Californians are facing.

Governor Gavin Newsom recently released the 2024-25 state budget, which includes hundreds of spending reductions and other actions to close a $44.9 billion deficit. This comes just two years after the state enjoyed a $97.5 billion budget surplus, thanks to increased revenues during the post-pandemic economic recovery.

State Senator Brian Dahle, R-Bieber, expressed concerns about the rising costs in California, particularly in housing, electricity, and gas. The typical house in California requires a household income of $224,000, three times the median household income, to afford. Gasoline prices in California are higher than even Hawaii’s, and proposed taxes could raise prices even further by 2026. The state’s energy costs are also among the highest in the nation.

Adding to the financial strain, the Metropolitan Water District of Southern California, which supplies water for 19 million Americans, is raising rates by 40% due to revenue losses from high levels of water conservation.

As Californians continue to grapple with the high cost of living, state officials are facing pressure to address these challenges and find solutions to improve opportunity for all residents.