Californians are being crushed by a cost-of-living crisis that has spiraled out of control — and they know it. In a recent PPIC Statewide Survey, more than six in ten Californians say they are seriously considering leaving the state due to the high cost of living. Rent, utilities, insurance, and basic goods all cost more here than almost anywhere else in the nation. According to the U.S. Bureau of Economic Analysis, California’s cost of living is nearly 40% higher than the national average — a staggering statistic for a state that prides itself on opportunity.
This crisis isn’t abstract. It affects every paycheck, every grocery bill, and every attempt to build a financial future. The root causes of this affordability emergency are excessive regulations that increase our housing costs, utility costs, and gasoline costs. Yet, instead of facing these facts, too many lawmakers in Sacramento are reaching for political Band-Aids with new and higher taxes while California continues to hemorrhage jobs and residents to other states. Now, rather than controlling costs, legislators are trying to control prices.
Let’s start with Senate Bill 709, which would empower state agencies to impose price caps on consumer goods. SB 709 is a foolish proposal which would reduce tax revenue to local schools and government services while driving up costs for renters and small businesses that rely on affordable and readily available self-storage facilities.
Then there is Assembly Bill1157, which would lower rent caps on both multifamily and single-family homes. Another foolish move that has been proven by economists across the spectrum to stifle housing supply, not expand it. And let’s not forget that similar rent control measures have been overwhelmingly rejected by voters three times in the last eight years.
To add to these bad ideas, there’s renewed talk of capping corporate profits. A short-sighted move that would further drive businesses and jobs out of the state rather than bring prices down for working families.
These proposals may score political points, but they do nothing to address the true drivers of higher costs in California – regulatory burdens and supply constraints. Worse, they divert attention from where we should focus our efforts for meaningful solutions.
Thankfully, some leaders in Sacramento understand that you don’t make California more affordable through additional regulations that drive up costs even higher.
We commend Senator Tom Umberg for his principled leadership in halting Senate Bill 222 in the Senate Judiciary Committee. That bill aimed to hold fossil fuel companies financially liable for climate-related disasters by allowing individuals and insurers to sue these companies for damages, resulting in billions in new and higher costs paid for by Californians in the form of higher gas prices and electricity bills.
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Californians don’t need more scapegoats. They need leaders like Senator Umberg; leaders who understand that price caps and increased regulation will only increase costs further and limit financial opportunities for our residents.
Ron Lapsley is president of the California Business Roundtable. Jeffrey Ball is president & CEO of the Orange County Business Council
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