California Middle Class Family Cost of Living Penalty = $28,037

Written by Chriss W. Street

The Transparency Foundation’s latest “Cost-of-Living Penalty Report” by comparing annual costs of major household budget categories in the 50 U.S. states, found the average California middle class family pays $28,037.28 more per year due to higher housing, utilities, food, gas, transportation, healthcare, insurance, childcare, and taxes.

Chairman of the non-profit Transparency Foundation Dave McCulloch, blames California politicians’ bad policies for imposing “unreasonable and completely unnecessary cost-of-living-penalty.” Furthermore according to McCulloch: “In every household budget category, the cost of living in California is exponentially higher than the national average – and costly mandates and bad policies are to blame.”

The Foundation analysis demonstrates that the typical California middle-class family of three earning $130,000 a year, faces a shocking “California Cost-of-Living Penalty” of $28,037.28 versus paying the national average cost for each household category.

The California “Penalty” rose in 2023 by $1,558.56, or 5.5%, versus the Penalty of $26,478.72 in 2022. Given that the 2023average cost increase for the other 49 states was $796.44, California families suffered about three times higher cost increases:

• Middle Class Annual Household Income = $130,000

• Average Annual Income Taxes = $42,813

• Middle Class Family Annual Net Income = $87,187

• Middle Class Family Monthly Net Income = $7,265.58/month

• Total Monthly cost of living in California = $9,668.39

• Total Monthly cost of living if paying national averages =$7,331.95

• Net “Cost of California” in 2023: $28,037.28

Transparency Foundation’s calculation for California Cost-of-Living Penalty by category:

• Housing Costs = 108% higher for homeowners on average;

• Rent Costs = 47% higher on average;

• Gas Costs = 46% higher on average;

• Food Costs: 10% higher for grocery bill on average;

• Water Costs: 10% higher on average;

• Healthcare Costs: 3% higher for health care services on average;

• State and Local Taxes: 60% higher on average;

• Childcare: 52% higher on average;

• Electricity Costs: 101% higher on average; and

• Car Insurance: 27% higher on average.

The Transparency Foundation’s report is consistent with recent polling from the Public Policy Institute that almost two thirds of Californians believe the state is headed in the wrong direction:

Consistent with the Transparency Foundation study, the Public Policy Institute found about a quarter of all Californians are unable to make monthly household category cost payments: