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Everyone knows living in California is more expensive than in other states – but a new report makes a staggering total calculation of all the added costs and blames state politicians for imposing what it calls an “unreasonable and completely unnecessary cost-of-living penalty.”
“This report is a bombshell — it proves what Californians have felt for years: our state’s sky-high cost of living isn’t an accident, it’s the direct result of bad policies from our state’s own politicians,” says Assemblyman Carl DeMaio, Chairman of Reform California. “Working families are being punished by costly mandates and out-of-control regulations — and they’re literally paying thousands more each year just to live here.”
The Cost of California, an annual report by the nonpartisan nonprofit group The Transparency Foundation, compares costs in every major household budget category between California and national averages – including housing, utilities, food, gas, transportation, healthcare, insurance, childcare, and taxes.
“California politicians have taken a middle-class family making $130,000 a year and pushed them into a $32,000 annual budget deficit — simply because of the higher costs caused by state laws,” DeMaio continues. “That’s not just unsustainable — it’s immoral.”
The study reveals that a typical middle-class family of three earning $130,000 faces a shocking “Cost of California” penalty of $29,753.16 compared to if they paid national averages in each category. Worse, that same family ends up running an annual deficit of $32,391 versus just $2,637.84 if their costs were simply benchmarked to the national average in each category.
The Cost of California report documented the following cost penalty in each category:
The only category showing a cost benefit was homeowners insurance — which was 32% lower than the national average — but DeMaio warns that will change soon due to new policies approved by Sacramento politicians that allow major premium hikes using risk-based pricing models.
The report also reinforces what public polling has shown: Californians are feeling the squeeze. A 2023 LA Times poll found 40% of Californians were seriously considering moving out of the state — with 61% citing cost of living and 27% citing politics as the reason. A 2025 PPIC poll found 51% of Californians reporting financial hardship due to rising prices — including 80% of those making less than $40,000 per year.
“If Sacramento politicians want to argue their mandates and regulations are justified, they need to start proving it,” DeMaio says. “We now have hard numbers on how much their laws are costing the average Californian — and they should be forced to explain the so-called ‘benefits’ of those costs.”
To combat this crisis, the report recommends the creation of a state Cost-of-Living Benchmark Commission to review all laws and mandates and compare them to lower-cost states. It also suggests a full cost-benefit analysis for any new state regulation or law that could increase expenses for residents.
“We need to tie every law and mandate in California to a true cost-benefit analysis — and we need to start benchmarking our policies to other states that are actually affordable,” DeMaio concludes. “The only way to fix this is to expose the truth and force real reform.”
The Transparency Foundation has announced it will update its Cost of California report annually and continue advocating for cost-cutting policy reforms.
But DeMaio says one of the best ways to force reform is to elect reform-minded politicians to office. That’s why Reform California is leading the fight to flip key seats in 2026 and elect reformers who will make addressing the cost of living crisis a priority. As part of that effort, DeMaio and Reform California will release and promote their annual voter guide ahead of California’s June 2026 Primary Election.
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