Under Gavin Newsom, California is First in Homelessness, Poverty, Illegal Immigration, and Other Negative Indicators

It has been exactly seven years, two months, and 26 days since Gavin Newsom became governor of California. California is now #1 in homelessness, poverty, illegal immigrant population, benefits for illegal immigrants, budget deficit, income tax, gas tax, gas prices, and people leaving the state, and ranks near the top among states in housing costs, retail crime, adult illiteracy, and anti-business regulation.

#1 in Homelessness

This is one of the most thoroughly documented rankings. Of the nation’s 771,500 people experiencing homelessness in 2024, over 187,000, roughly 24%, were in California, with two in three unsheltered, accounting for nearly half the country’s unsheltered population.

More than one in every three people in the United States experiencing homelessness as an individual was found in California, and the state accounted for half of all individuals counted in unsheltered locations. Over the longer period from 2007 to 2023, the largest absolute increase in homelessness occurred in California, with 44,964 more people, a 41% rise.

Newsom’s administration touts a slowing growth rate, and there is some basis for that. In 2024, while homelessness increased nationally by over 18%, California limited its overall increase to just 3%. However, the state remains by far the national leader in total numbers, and although the number of homeless in California is growing at a slower rate, it continues to grow.

Furthermore, a state auditor found that California has failed to consistently track spending and outcomes across its more than 30 homelessness programs, and the audit was able to determine cost-effectiveness for only 2 of them.

#1 in Poverty

California’s poverty rate, at 17.7%, continued to be the highest in the United States in 2024, tied with Louisiana, with no tangible improvement from 2023. About 7 million state residents lacked the resources to meet basic needs. This figure comes from the Census Bureau’s Supplemental Poverty Measure, which adjusts for cost of living, particularly housing.

California is staggeringly wealthy, home to major agricultural businesses and influential global tech companies with an economy larger than many nations, yet 7 million Californians live in poverty, a number roughly equivalent to the combined populations of Los Angeles, San Diego, San Jose, and San Francisco. Child poverty more than doubled since 2021, rising from 7.5% to 18.6% in 2024.

#1 in Illegal Immigrant Population / #1 in Benefits for Illegal Immigrants

California leads the nation with approximately 2.3 million illegal aliens, and has built the most expansive benefits system for them of any state in the country, offering driver’s licenses, college scholarships, low-income tax credits, pandemic cash payments, and full Medi-Cal health coverage. By 2024, all illegal immigrants meeting income requirements were enrolled in Medi-Cal at a cost of $8.5 billion annually, $2.7 billion above projections.

The total annual cost of benefits and services to the illegal immigrant population, estimated at 3.23 million when U.S.-born dependents are included, runs approximately $22.8 billion per year, a figure that nearly mirrors the state’s projected budget deficit, according to FAIR.

#1 in Budget Deficit

California’s fiscal deterioration under Newsom has been severe. In January 2024, Newsom’s office projected a $38 billion deficit for fiscal year 2024–25, while the nonpartisan Legislative Analyst’s Office projected $68 billion, revised to $73 billion, making it the largest state budget deficit in the country.

For the fourth year in a row, the LAO and the administration are forecasting multiyear budget shortfalls, with operating deficits of $27 billion in 2027–28, $22 billion in 2028–29, and $23 billion in 2029–30. State Sen. Roger Niello attributed the structural deficit to Democrats’ “unstoppable spending problems.”

#1 in Income Tax

Top marginal rates span from 2.5% in Arizona and North Dakota to 13.3% in California, which also imposes a 1.1% payroll tax on wage income, bringing the all-in top rate to 14.4%.

#1 in Gas Prices

California retains its top spot as the state with the most expensive gas in the nation, with a gallon of gas costing $5.89 as of early April 2026, beating out Hawaii at $5.46. California levies the highest total state gas tax in the nation at 70.9 cents per gallon, followed by Illinois and Washington. Beyond the base excise tax of about 61 cents, California-specific costs, including a special fuel blend, roughly 23 cents from cap-and-trade, and another 14 cents from the Low Carbon Fuel Standard, make up a substantial portion of every gallon’s price. The state has also closed two refineries, reducing in-state refining capacity and forcing more imports, which drives prices further.

#1 in People Leaving State

California was the hardest-hit state for domestic outmigration, with roughly 254,000 more people leaving than moving in, according to 2024 Census American Community Survey data. IRS data also shows California has the highest net loss of taxpayers in the country, with one leaving every 1 minute, 44 seconds.

From 2010 through 2024, nearly 10 million people moved out of California to other states, while just over 7 million moved in. SmartAsset’s analysis of IRS migration data found that California lost the most residents to Texas, with 54,136 households departing and carrying an average adjusted gross income of $146,000.

This net loss of high earners represents a structural risk to California’s income-tax-dependent revenue base.

While no state can lead every category, California ranks near the top in several others, including housing costs, retail crime, adult illiteracy, and anti-business regulation.

#2 in Housing Costs

Accurate, depending on metric. By median home price, Hawaii has the highest average house price in the United States at $840,256, with California close behind at $784,840. California has the highest average rent in the nation. Those looking to rent in California pay around $2,542 per month, the highest average rent in the U.S. By affordability ratio (home price to income), Hawaii tops the list at 8.8 and California follows at 8.2, meaning homes cost over eight times the median household income. Only 16% of California homebuyers could afford to purchase a median-priced existing single-family home in the third quarter of 2024.

Honorable mention: Retail Crime

California does not lead all 50 states in every retail crime metric, but it is the dominant locus of organized retail crime nationally. Reported shoplifting in California in 2023 was 28% higher than in 2019, and commercial burglary remained about 6% above its pre-pandemic level. Retail theft increased by almost 70% in Sacramento, 65% in Alameda, 41% in San Mateo, and 40% in Los Angeles between 2019 and 2023, with those four counties accounting for 91% of the statewide increase.

Prop 47 (2014), which reclassified many theft offenses from felonies to misdemeanors, is widely cited as a contributing factor, and voters passed Prop 36 in November 2024 to partially reverse it. The state has since ramped up enforcement, though the volume of the problem reflects years of policy failure.

Honorable Mention: Adult Illiteracy

California scores poorly on adult literacy but the “number one” designation depends heavily on methodology. The state consistently ranks near the bottom on the National Assessment of Adult Literacy and on K–12 reading proficiency scores. As of the most recent NAEP data, California’s fourth-grade reading scores remain below the national average, and its adult functional literacy rates are dragged down by a large non-English-speaking population. This is a legitimate concern but calling it “#1 in illiteracy” overstates the precision of available rankings.

Honorable Mention: Failing Schools

California’s education rankings look very different depending on whether researchers control for demographic factors or measure the entire student population as a whole. When the full population is measured, which is the relevant standard for evaluating a state’s governance outcomes, California consistently ranks poorly.

On the National Assessment of Educational Progress (NAEP), often called the Nation’s Report Card, California fourth-graders rank in the bottom ten states in both reading and math. Eighth-grade scores follow a similar pattern. These are not adjusted for demographics — they reflect what California’s school system is actually producing across its entire student population, which is the only measure that matters for policy accountability purposes.

California’s own data is damning. The California Assessment of Student Performance and Progress (CAASPP) shows that fewer than half of California students meet grade-level standards in English Language Arts, and fewer than one in three meet standards in mathematics. In many urban districts — Los Angeles, Oakland, Fresno, San Bernardino — the numbers are significantly worse.

Honorable Mention: Anti-Business Regulations / Worker Restrictions

Supported directionally, but hard to quantify as a precise “number one.” The Tax Foundation and CATO Institute consistently rank California near the bottom for business climate. The state has one of the most extensive labor codes in the country, a strict CEQA environmental review regime, the highest corporate tax rate west of the Mississippi, and AB5 governing gig worker classification.

AB5, signed by Newsom in September 2019, reclassified many independent contractors as employees, requiring companies to provide minimum wage guarantees, overtime pay, unemployment insurance, workers’ compensation, and other benefits.

Given his track record, a vote for Newsom is a vote for degeneration.

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