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Last year’s presidential election underscored, particularly to Democrats, that the costs of living were a major factor in the outcome.

Dan Walters
CalMatters

Inflation had increased sharply during Joe Biden’s presidency, and voters’ angst about rising prices worked against Vice President Kamala Harris’ campaign to succeed him in the White House.

Not surprisingly, therefore, when the California Legislature opened its 2025 session, its dominant Democrats declared that they would focus on taming the state’s notoriously high costs for housing, fuel, utilities and other necessities of modern life.

The session ended last week and as it did, by happenstance, the Census Bureau reported that California once again has the nation’s highest “supplemental” rate of poverty when its living costs are included in calculations over a three-year period.

California’s rate, 17.7%, means that nearly 7 million of its residents are impoverished, 5 percentage points higher than the national rate and tied with Louisiana. The lowest rate is 6.7% in Maine.

California’s rate is also 2.3 percentage points higher than it was in the Census Bureau’s previous three-year calculation, implying that its living costs vis-à-vis incomes had increased markedly.

The situation is even gloomier in a report last month from the Public Policy Institute of California and the Stanford Center on Poverty and Inequality.

Using methodology similar to that of the Census Bureau, they calculate that 16.9% of Californians were poverty-stricken in 2023 and another 17.9% were near-poor. That translates into 13.2 million Californians struggling to put roofs over their heads, food on the tables, fuel in their cars and electric power in their appliances and light fixtures.

Los Angeles County, which has about 25% of the state’s population, has the highest poverty rate of any county, 19.9%. Poverty in the Central Coast region is nearly as high at 19.3%, while Sacramento has the state’s lowest rate, 13%.

Another data point about poverty in California is found in the newly enacted state budget. It declares that 14.9 million Californians are enrolled in Medi-Cal, the state’s health care program for the poor.

So, one might wonder, did the Legislature’s 2025 session deliver on promises to reduce the costs of living?

Legislative leaders claim some success.

“We went big,” Assembly Speaker Robert Rivas, said in a summary of the session’s work. “We produced results. We delivered historic progress — on housing, on energy, on climate, on health care, and on human rights. And that progress is something every one of us can be proud of.

“And while our work is not finished fixing California’s housing system, this year marked a turning point in California’s housing story,” Rivas continued. “And today, we also advanced the most significant energy package in years. We passed measures that will deliver real relief for families on their electricity bills. We took action to stabilize gas supplies, to prevent price shocks — while keeping health and environmental protections in place.”

By easing what had been a crackdown on gasoline refiners and sanctioning more oil production, legislators and Gov. Gavin Newsom say they are avoiding a gasoline supply crisis that could send costs soaring as the state shifts to a zero-emission economy. Two refineries have already announced closure plans, and Chevron has dropped hints that it could abandon its Richmond refinery.

By integrating California’s electric power grid with those of other Western states, the elected officials say, shortages of electric power will be mitigated.

By reducing impediments to housing development, they say, higher levels of construction will moderate increases in rents and home prices.

Whether any of these legislative efforts actually lower or at least stabilize Californians’ living costs won’t be known for months, or even years. Meanwhile, California’s high poverty rate will continue to be a civic embarrassment.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.