Increases in cost-of-living have become a fact of life for many Americans, and according to a recent survey conducted by Marist Poll and Yahoo Finance earlier this year, 47% of Americans regard “cost of living as their biggest obstacle to saving money.”

However, few are feeling the pinch more than Californians, who experience the highest cost of living in the country at 12.6% above the national average. The cost of housing is especially high – 57.8% more than the rest of the country. 

Making this even more difficult is the fact that Californians additionally experience a hidden tax on everyday goods and services due to a significant increase in lawsuit abuse in recent years. 

Lawsuit abuse costs the average California family $8,306 per year in increased costs of goods and services as well as reduced earnings—making it the highest loss due to lawsuit abuse in the nation, according to an April 2025 study released by The Perryman Group. Cost inflation accounts for nearly $4,000 in a “hidden tax” charged to Californians on everything from prescription medications—which cost nearly 11% more due to lawsuit abuse—to home insurance premiums, which are 5% higher in California on average.

As a result, in a recent survey conducted by Public Opinion Strategies, nearly 3 of every 4 California voters recognize lawsuit abuse as a key driver of rising costs. Additionally, a bipartisan supermajority (83%) want legislators in Sacramento to take action on lawsuit abuse reform, ensuring that victims can still get what they deserve in injury cases while cracking down on predatory legal practices that result in higher prices for all Californians. 

Additionally, California cities like Los Angeles are likely taking on high-interest debt to handle skyrocketing liability payouts in recent years, having to borrow tens of millions to replenish city reserves after exceeding the budget for liability payouts by an estimated 220% this fiscal year. This borrowed money will accrue tens of millions of dollars in interest, which will be shouldered by California taxpayers once again. 

Lawsuit reform is urgently needed in California—not just because it costs the average family over $8,000 a year, but also because runaway liability payouts are crippling city budgets. As a result, cities are left with fewer resources for essential services like emergency response, infrastructure, and public education.