Despite continued job growth and cooling inflation, Californians are still pessimistic about the economy. In fact, they name economic issues and homelessness as their top priorities for state leaders to work on this year. Last week, survey analyst Rachel Lawler and associate survey director Dean Bonner talked about these and other new findings from PPIC’s February survey.

Two-thirds of Californians expect bad times for the state economy in the next 12 months. This level of economic pessimism “is higher than at any time in the past two years,” said Lawler, but it is similar to views in late 2020 when California was in the midst of the COVID recession.

Homelessness continues to be a pressing concern for residents. Seven in ten Californians say that the presence of homeless people in their community has increased in the last year. Across regions, very few residents (5% or fewer) say that the number of homeless people has decreased.

In early January, Governor Newsom released a $297 billion spending plan and announced an estimated $22.5 billion state budget shortfall. Despite the shortfall, only about a third of adults (34%) say the state budget situation is a big problem. Similar shares held this view last February, when the state had an estimated $97.5 billion budget surplus. Lawler noted that this generally positive view may be related to lack of awareness about the shortfall, especially since the budget plan does not contain any new general taxes.

Majorities of adults approve of Governor Newsom (58%) and President Biden (53%). However, political trust overall is low, especially at the federal level, said Bonner. Fewer than half of Californians (46%) say that they can trust state government to do what is right just about always or most of the time, and only a third (32%) say this for the federal government. Political trust has been low among Californians—and American nationwide—since the 1990s, said Bonner.

Californians’ views of the two major political parties are also “not great,” added Bonner. About half of adults have a favorable view of the Democratic Party, and fewer than one in four have a favorable view of the Republican Party. Nearly seven in ten say that a third party is needed because the existing parties do a poor job, an increase of 17 points since a decade ago.

As a new legislative session gets underway, the PPIC Statewide Survey will continue to track Californians’ evolving views on the economy, politics, and other key issues.