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Newsom’s ‘California Dream’ Faces $26K ‘Cost-of-living Penalty,’ Homelessness Director Flees High-Cost State After Another Eviction

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California’s state website highlights what it describes as the “California Dream,” defined as “the idea that every person can achieve a better life, regardless of where they start out.”

But it’s becoming increasingly hard for California residents to afford the state’s high costs.

According to a recent study by the nonpartisan Transparency Foundation, a family earning $130,000 per year faces an estimated “Cost of California” penalty of $26,478 compared to if they paid the national average for different cost-of-living categories.

The $130,000 in annual earnings is defined in the study as California’s middle class. For those earning less, it’s not just the cost-of-living penalty residents have to worry about — it’s whether they can afford to live in California at all. A piece from the Los Angeles Times highlights one example.

Nathan Sheets, director of the homelessness services organization The Center in Hollywood, has been served his second eviction notice in three years.

Citing an affordability crisis and lack of housing security, Sheets is giving up California for good, taking his family back to lower-cost Indiana and leaving his job helping the homeless in California.

Sheets notes the irony, writing, “If we can’t afford to live here ourselves, we can’t help the unhoused population we want to serve.”

California’s reputation as a high-cost-of-living state has been bolstered lately, with gas prices now at $5.32 per gallon compared to the $3.59 national average, according to AAA, and a recent bump in the minimum wage to $20 per hour for fast food workers.

Rising costs are also impacting utility bills. After the California Public Utilities Commission approved another rate hike, California-based utility company PG&E Corp. (NYSE:PCG) will again raise prices for residents’ electricity and gas bills after increasing them just a few months ago.

Customers who have an average residential utility bill of $254 in 2023 are now set to pay new monthly bills of around $292.

The high cost of living pushing the California dream out of reach for residents is not a new phenomenon. For the fourth straight year, California topped the nation with the largest amount of net outbound movers, according to data from U-Haul.

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