Policy Analysis — June 2026

Cost of Living: The California Tax

The highest taxes, gas, groceries, and utilities in the continental U.S. — and it's accelerating.

COL Index

142

vs 100 national avg

Monthly (Single)

$3,514

Basic expenses

Monthly (Family)

$7,739

Family of four

Living Wage

$110K

Family of four

Cost of Living Index by State

US Average = 100. Higher = more expensive.

California's cost of living is 42% above the national average. Housing alone is 97% higher. A family of four needs $110,255 just to meet basic expenses -- and the median family income is only $105,232. Most California families are technically underwater before any discretionary spending.

Where the Money Goes

Housing+97% vs US avg

Rent $2,500/mo 2BR. Mortgage on median home: $5,200/mo at 6.25%.

Transportation+42% vs US avg

Gas $5.90/gal. Car insurance 30% above avg. Registration fees highest in US.

Utilities+21% vs US avg

Electricity 33.8c/kWh (87% above national). Water rates rising with infrastructure costs.

Food+15% vs US avg

Groceries 15% above national avg. Restaurant meals 20%+ premium in metro areas.

Healthcare+12% vs US avg

Ranked 23rd in access/affordability. Premiums above average. Provider shortages in rural areas.

Childcare+20% vs US avg

Average $16,000-$22,000/year per child. Bay Area can exceed $30,000. Free pre-K coming 2025-26.

Sources: EIA, CAISO, CA Energy Commission, CPUC, CA Legislative Analyst, NRC, AAA, GasBuddy, Tax Foundation, MIT/Stanford, Kpler, Bloomberg, Reuters, CalMatters, UC Davis. March 2026.