SACRAMENTO, Calif. — California continued to have the highest poverty rate in the nation last year at 17.7%, tied only with Louisiana, according to new data released this week by the U.S. Census Bureau.

The state’s supplemental poverty measure, or SPM, declined from 2023, when it stood at 18.9%. Still, the 2024 figure means that nearly 7 million Californians were unable to afford basic necessities like food, housing and medical care.

Laura Pryor, the research director for the California Budget & Policy Center, noted that the state’s poverty rate dropped to a historic low of 11% after federal policies were implemented to help Americans weather the COVID-19 pandemic.

Now, she said, “millions of people have been pushed back into poverty as policymakers allowed these effective policies to expire.”

Pryor said that the situation is particularly dire for California seniors and children, especially kids living in a household where relatives have mixed immigration or citizenship statuses. The supplemental poverty measure showed that the state’s child poverty rate more than doubled, jumping from 7.5% in 2021 to 18.6% in 2024.

“This trend will only worsen with the recent federal budget decisions to take the child tax credit away from mixed-status families,” Pryor said. “That credit alone kept 2.9 million children out of poverty in 2021.”

California’s senior poverty rate surged to 21.1%, far above the national average of 15%, largely due to the state’s high cost of living and out-of-pocket medical expenses. Nationally, the supplemental poverty measure showed that medical expenses pushed 7.5 million people into poverty.

Renters — especially those from communities of color — remain disproportionately affected. In 2024, 27.1% of California renters were in poverty, compared to just 11.1% of homeowners.

“The lack of federal and state investments in affordable housing and rental assistance — combined with enacted federal cuts to health and food assistance — will mean that more families and individuals will face impossible choices between having enough food, accessing needed medical care and paying the rent.”

The federal policy reversal and state consequences

Much of the rise in hardship can be traced to the reversal of temporary federal relief programs, including the expanded child tax credit and enhanced SNAP benefits. Those supports expired in 2023, and in July 2025, Congress passed a federal budget that further slashed funding for healthcare, food assistance, and housing.

Federal cuts to Medicaid, supported by California’s nine House Republicans, could lead to up to 3.4 million Californians losing their Medi-Cal coverage, Pryor said, and many who maintain their coverage will see their health care costs rise due to new Medi-Cal co-payments.

Actions by the California Legislature and governor will make things worse for many of the state’s poorest residents, she said. After expanding Medi-Cal to undocumented residents in recent years, the state’s 2025–26 budget froze enrollment for them and introduced new co-pays.

“These are much smaller in magnitude and breadth than the federal cuts,” said Kayla Kitson, senior policy fellow at the California Budget & Policy Center, “but they can compound the harms.”

Two measures of poverty, two stories

At the national level, the official U.S. poverty rate fell to 10.6% in 2024, down from 11.1% the year prior — marking a second consecutive year of improvement and a reduction of about 1.5 million people living below the federal poverty line.

Under this measure, several demographic groups saw gains. Child poverty fell to 14.3%, while men, Hispanic Americans, and Asian Americans saw notable declines. Even among traditionally vulnerable groups — such as non-working adults and those without a high school diploma — poverty declined, driven in part by ongoing effects from social security and refundable tax credits.

However, the official measure has important limitations. It’s based strictly on pre-tax cash income and uses a national threshold, meaning it does not account for regional costs of living, non-cash benefits like SNAP or housing subsidies, or expenses such as medical care.

That’s where the supplemental poverty measure comes in. It offers a fuller picture — especially in states like California, where housing and health care costs far exceed national averages.

Nationally, the SPM held steady at 12.9%, showing no progress from 2023. When looking at economic deprivation through this lens, the picture was not encouraging for groups often on the margins: The SPM poverty rate for Black Americans rose to 20.7%, while seniors (65 and older) saw their rate increase from 14.2% to 15.0%.

Systemic disparities and deep poverty

This new Census data for the state also underscores persistent racial inequities. Black and Latino Californians experienced poverty rates about 10 percentage points higher than white residents.

“These disparities reflect generations of systemic racism, which will only be exacerbated by recent federal cuts to Medicaid and tax breaks for the wealthy,” Pryor said.

Almost 2 million Californians are living in deep poverty — defined as having total resources, including public benefits, less than half the poverty threshold, according to the findings. For a family of four, Pryor said, that’s around $20,000 per year.

“Traditional public supports often don’t touch families in deep poverty,” she said. “Californians need state leaders to take bold action to mitigate the harm and hardship of these federal cuts.”

A call for revenue and responsibility

With federal help shrinking, the Budget & Policy Center argued that California must find new ways to raise revenue, and Kitson urged legislators to pursue it from those who have benefited most from federal tax cuts.

“Since corporations and wealthy individuals are among the largest beneficiaries of the federal tax cuts, which partially paid for these cuts to basic needs programs,” Kitson said, “it makes sense for California policymakers to ensure that these groups are contributing more in state taxes to support the investments that will be needed to alleviate the suffering that will be caused by these cuts.”

Critics often argue that raising corporate taxes could drive businesses out of California. Kitson pushed back, saying the most profitable corporations can afford it.

“Corporate taxes are a tiny share of overall business expenses. They’re about 0.1% of expenses,” she said.

In addition, Kitson said, these are taxes companies would have to pay even if they were based outside California because they’re based on sales in the state, not how much property or how many employees they have here.

Federal budget fights could deepen crisis

Looking ahead, Pryor said state policymakers are closely watching ongoing federal budget negotiations, especially around appropriations and discretionary spending, as that could affect funding allocations for California.

These negotiations will affect Medi-Cal, housing supports and other safety-net services, Pryor said.

Whether California chooses to blunt the damage from federal rollbacks — or allow poverty to deepen — may define its future as a place of opportunity or of widening inequality, the budget center’s researchers warned.

____

©2025 The Sacramento Bee. Visit at sacbee.com. Distributed by Tribune Content Agency, LLC.