Middle Class Workers Are Bailing On California And Making For These Red States

Chris White | Energy Reporter

Middle-class families are leaving California in droves and heading for red states as rental prices and gas taxes continue sky rocketing in the Golden State, according to a Wednesday CNBC report.

California’s high housing prices and rising gas prices are driving away what remains of the state’s low income citizens. Those migrating from the coastal state are making way for places like Las Vegas and Arizona, where housing prices are relatively cheap compared to California.

“Lower income Californians are the ones who are leaving, not higher income,” research and consulting firm Beacon Economics partner Christopher Thornberg told CNBC reporters. He based his analysis on U.S. Census Bureau’s American Community Survey data, which show more people moved out of California from 2016 to 2017 than into the state.

California saw a loss of over 138,000 people in that 12-month period, according to the data, while Texas experienced an uptick of more than 79,000 people. Arizona and Nevada, meanwhile, gained more than 63,000 and 38,000 residents, respectively. California’s extraordinarily high gas taxes is another reason for the mass exodus, CNBC’s report noted.

Democratic Calif. Gov. Jerry Brown signed into law in April 2017 a 12 cents increase per gallon on citizens, which raises the tax on diesel fuel by 20 cents a gallon. It also implements an additional charge to annual vehicle license fees ranging from $25 to $175 depending on the automobile’s value.

The measure would save taxpayers money, Brown said. But the law became deeply unpopular — a November 2017 Los Angeles Times Poll showed more than half of Californians want to repeal the measure.

Things are now coming to a head as housing prices continue their upward march and California officials double down on gas taxes. The financial pressures are leading cash-strapped citizens to make for the East.  Housing prices in the city of sin are far lower than in California, Dave Senser, a Californian planning a move to Las Vegas, told reporters.

“Rents here are crazy, if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada, they don’t have a state income tax. And every little bit helps,” said Senser, who lives on a fixed income. “The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.”

Median monthly rent for a Los Angeles one-bedroom apartment is $2,300, while it’s more than $3,400 in San Francisco, according to industry tracker Zumper. The median rent for a Las Vegas one-bedroom unit is $925 and $945 in Phoenix. Some of the most popular areas for Californians from 2015 to 2017 were Texas, Arizona, Oregon, Washington and Colorado, United Van Lines data shows. Nevada remains a top destination, other experts also said.

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