Survey: Californians Predict Bad Times For The State's Economy Next Year

By Madison Hirneisen | The Center Square, The Center Square California

November 14, 2022

(The Center Square) – "As residents across the Golden State feel the impacts of inflation on their wallets, a majority of Californians say they do not have optimistic predictions for the state’s economy in the coming year," according to a new survey from the Public Policy Institute of California.

A clear majority, 69%, of Californians surveyed said they expect bad times for the state’s economy in the coming year – a percentage almost identical to December 2020 when 68% of Californians said they expected bad economic times in the midst of the pandemic. Californians were slightly more optimistic about the economic outlook for the next five years, with 37% expecting good times and 62% predicting periods of depression and unemployment.

The survey, conducted between Oct. 7 and Oct. 21, came at a time when California’s gas prices soared to near-record levels after several refineries went down for maintenance in September. At the time of the survey, 38% of Californians said the cost of gas and transportation was causing “moderate hardship,” while 15% said it was causing “severe hardship.” Forty-three percent told PPIC they worried almost every day about the price of gas and transportation.

While gas prices have receded since early October, “they remain higher than they have been in recent years, and this is causing hardship for many Californians,” the survey notes.

Gov. Gavin Newsom has highlighted high gas prices in recent weeks, pointing out record profits raked in by oil companies. Newsom has claimed the companies are engaging in “rank price gouging,” and said he plans to call a special session of the Legislature in December to discuss a windfall profits tax on the excess profits of oil companies.

On inflation, 49% of Californians surveyed said they were “upset,” and another 48% said they were “concerned but not upset.” Seventy-one percent of Californians also believe the gap between the rich and poor in the state is growing, and 67% say children growing up in California today will be “worse off than their parents.”

Acknowledging the threat of a possible economic downturn, state officials say California has been preparing for a possible by practicing budgetary restraint.

During the 2022-2023 budget year, California had a record $97.5 billion surplus, of which about $49.2 billion was discretionary. When the final budget was signed in June, officials estimated that 93% of the discretionary surplus was spent on one-time purposes to reduce ongoing spending.

In September, Gov. Gavin Newsom vetoed dozens of bills over concerns about millions in spending not accounted for in the state budget. In several veto messages this year, Newsom repeated a similar refrain: “With our state facing lower-than-expected revenues over the first few months of this fiscal year, it is important to remain disciplined when it comes to spending, particularly spending that is ongoing.”

"California’s revenues came in nearly $7 billion below forecast in the first quarter of the fiscal year," the Department of Finance reported in September. "State officials, however, say the state’s reserves and budgetary caution should help California maintain stability in the coming months," as previously reported by The Center Square.

Newsom’s office said the 169 bills he vetoed saved “billions in taxpayer dollars.”

The focus of the work of The Center Square California is state and local-level government and economic reporting that approaches stories with a taxpayer sensibility.