Californians are leaving the state. Following are just five of the many reasons Californians are fed up and leaving the once-great state. High taxes, over-regulation, woke politics and high living costs have put California’s economy in a death spiral. And, almost undoubtedly, tax payers in the remaining 49 states will ultimately need to bail the state out.
1. Median Home Prices
- U.S. median: $404,500.
- California median: $869,000 (2nd highest in the U.S., after Hawaii).
Meaning: Housing in California is significantly more expensive than the national average, placing homeownership out of reach for many residents.
2. Average Monthly Rent
- U.S. average: $1,595.
- San Francisco: $3,417.
- Los Angeles: $3,285.
Meaning: Rent in major California cities is more than double the national average, straining household budgets.
3. Gasoline Prices
- California average: $4.46/gallon (highest in the U.S.).
- Nevada: $3.71/gallon.
- Oklahoma: $2.55/gallon.
- Taxes and fees in California add ~$1.50/gallon.
Meaning: Californians pay significantly more for gasoline than residents of neighboring states, partly due to high taxes and fees.
4. Electric Utility Costs
- California average: 31.62 cents per kilowatt-hour (kWh), more than twice the U.S. average.
- Ranked 2nd highest in the U.S. after Hawaii.
Meaning: Despite having only the 8th-highest average power bills (thanks to a mild climate), California’s energy rates are exceptionally high, driven by wildfire prevention costs and a push to phase out oil and natural gas.
5. Climate Policy Impact
- New mandates (e.g., reducing carbon in automotive fuel) could add $0.50+/gallon to gas prices.
- Programs tying electricity prices to income create further cost implications.
Meaning: Climate policies are contributing to higher living costs, creating tension between environmental goals and affordability for residents.
Overall Implication
California’s high living costs, especially for housing, utilities, and fuel, disproportionately affect working- and middle-class residents. This economic strain has political ramifications, as demonstrated by shifting voter allegiances in some areas. Efforts to improve affordability will require addressing the state’s progressive climate and taxation policies, which currently exacerbate costs.
Unfunded Pension Liabilities: the Monster Hiding in the Closet
As of the end of the 2023 fiscal year, California’s unfunded public pension liabilities are estimated to be approximately $245 billion. Some analyses suggest that under such assumptions, California’s unfunded pension liabilities could be as high as $882 billion.
Additionally, when considering other post-employment benefits (OPEB), such as retiree health care, California’s total unfunded retirement liabilities increase further. A 2021 study by the Reason Foundation reported that California’s state and local agencies have a cumulative OPEB liability of $184 billion.
These unfunded liabilities represent the gap between the retirement benefits promised to public employees and the current funding available to meet those obligations. Addressing this gap is crucial to ensure the long-term financial stability of California’s public pension systems and to meet the commitments made to public sector workers.
What this means to California taxpayers is that they can expect further increases in taxes, reduced state and local provided services, or both.
Are you looking to leave California?
If so, visit my other website, Hill Country Homesteads, to learn why we left, how we decided where to go and how we feel about the move since being here.
