CA Governor Candidate Steve Hilton on Why California is Destroying Itself & How a Republican Can Win
In a Nutshell
Steve Hilton, a British-born Republican leading polls for California governor, blames the state's decline on union dominance, excessive regulations like CEQA, climate dogma inflating costs, unchecked spending fraud ($425B in 5 years), failing education, high crime from prison closures, and ineffective homelessness policies. His fixes include no state income tax under $100k with a 7.5% flat rate above (funded by $60B spending cuts via Cal DOGE), slashing housing/building fees, enforcing encampment clearances with mandatory rehab/jail and new mental health facilities, boosting in-state oil for $3 gas, and school reforms like phonics and accountability. Republicans can win in 2026 via top-two system, leveraging voter frustration (60-40 Dem-Rep vote split historically), Trump's endorsement, and a pro-worker platform targeting multi-racial working-class voters hit by high costs.
These notes were generated by AI and may contain inaccuracies.
Steve Hilton, Republican and British-born candidate for California governor, leads polls among five or six candidates. Democrats will narrow field via convention, possibly picked by Nancy Pelosi.
Steve Hilton introduces himself: parents Hungarian refugees from communism, grew up in Brighton, England in working-class immigrant family. Parents split young; stepfather Hungarian refugee who at 14 in 1956 fled Soviet invasion, ran across border through barbed wire, minefields, got shot at (half companions killed), ended in Austrian refugee camp, then England. Instills deep appreciation for freedom and opportunity. Worked hard, Oxford University, first job project manager for construction company to earn money. Post-Oxford: Conservative Party, big ad agency worldwide, started businesses including restaurants. Helped friend David Cameron win Conservative leadership, then 2010 election as PM; senior adviser in 10 Downing Street implementing reform program. 2012 moved to Silicon Valley (wife Rachel Whetstone at Google then Facebook/Uber); naturalized US citizen, renounced UK citizenship to be all-in American.
Rachel Whetstone ran comms/public policy for Google worldwide; move due to her travel/time differences after second son born.
Child of Hungarian immigrants fleeing communism shapes view of state vs. family/individual role. UK upbringing during Margaret Thatcher's rise after 1970s disaster: stagnant economy, sclerotic unions dominated, Winter of Discontent 1979 (strikes, dead unburied, trash piled in streets). Thatcher fixed it, stood against communism, focused on business/enterprise/hard work. Stepfather said: > "Mrs. Thatcher's for the workers and labor are for the layabouts."
California mirrors 1970s UK: union dominance in policy, sclerotic economy, high taxes (UK once 98% top rate with wealth taxes, 60%+ income). Current UK overregulation impossible to build mirrors California today.
No state income tax under $100k income; 7.5% flat tax above $100k. Pro-worker, pro-growth. California: 4th largest economy but highest unemployment, highest poverty (tied Louisiana), United Way report (year ago): >1/3 Californians can't afford basic needs. Help working poor squeezed by highest gas prices, electric bills (except Hawaii), housing, insurance.
$100k tax-free: official low-income definition in many CA counties; people earning $70-90k pay 9.3% state tax (higher than most states' top rate) plus highest sales/property/gas taxes.
Flat 7.5% for growth: Chief Executive Magazine ranks CA 50th/50 for business climate (tax driver); counters billionaire tax driving out wealth/business. Simplifies complex system.
18.5% revenue reduction (~$60B), back to pre-pandemic budget (doubled in 10 years, +75% in 5 years). 2019-2020 spending $1, now $2 with no change in needs. ~7 million households (<1/3 of 40M population) benefit from no tax under $100k.
Budget unsustainable: pandemic expansions baked in baseline; deficits even non-recession, dipping into rainy day fund irresponsibly.
Set up Cal DOGE (California Department of Government Efficiency) analyzing published spending data. Team includes state controller candidate Herb Morgan (elects to audit/stop improper spending). Four fraud reports:
- Cannabis tax (Prop 64) for substance abuse prevention: $350M to 500+ nonprofits (voter registration/activism).
- Climate mitigation fund (cap-and-trade gas taxes/electric surcharges): $1B over 10 years ($100M/year) for solar panels low-income apartments; $72M actual panels, $928M to nonprofits (voter registration, environmental justice).
- Project Homekey (post-pandemic homelessness: buy/convert/build for homeless): $3.8B mostly to developers, no real results.
Total estimate last 5 years: $425B fraud/waste/abuse (~$80B/year, ~20-23% of $349-350B annual budget).
Line-item veto power; realistic about needing legislature for taxes. Katie Porter (Dem opponent) at Fresno debate: > "I'm stealing Steve Hilton's tax plan... First 100 grand tax-free... take good ideas where we find them."
All candidates agree on problems: expensive living, struggling people, business climate disaster, overregulation, can't build. Consensus on diagnosis; solutions differ (Dems = more of same).
First Republican governor in 20 years shakes up Sacramento; some Dem legislators privately agree things gone too far, constrained by machine. Experience crossing lines: UK coalition gov't, shared office with opposite party, negotiated/implemented agreements.
Everyone agrees California is declining. It's not far-fetched to think a Republican can't win here. Pete Wilson did two terms. Schwarzenegger did two terms. That's 16 of the last 36 years. It is completely conceivable that a Republican could win. Steve Hilton, Katie Porter, and Chad Bianco have the same plan: under 100,000. All agree no taxes. They're all attacking affordability. Democrats don't believe in cutting services though. They want to increase taxes on businesses. Why is that plan not as good? Which one would be more appealing to voters? Voters agree paying less taxes is fantastic and makes California more competitive with Florida and Texas. But voters probably want to see Google and Apple pay more in taxes and not lose services.
We're losing jobs. That's the consequence of squeezing businesses and high earners more. Business exodus is happening now. The billionaire tax proposal is a complete disaster for the tech ecosystem, Silicon Valley job creation, and wealth creation. Everywhere in the state, business people say they are on the brink of leaving. In Pomona, Southern California, Sheet Metal (HVAC duct manufacturing) is a fantastic company with union jobs. They make HVAC systems critical for TSMC semiconductor factories and high-end manufacturing in other states, plus massive AI economy investments, but none in California. Policy report published today on getting full stack of those jobs in California. That company is on the brink of moving closer to facilities built in other states. What's the point of making stuff in California if it's not used here? Must stop squeeze on business.
Housing cost is most impactful to lived experience. For 40 million residents, rents and homes are so expensive. Three structural forces underpin why everything is difficult and expensive in California, showing why a Democrat can't fix it: union power, litigation, and climate dogma. They converge in housing.
Not building enough homes for jobs created and population size. Classic supply and demand. Rent control out of control leads to empty properties because rights swung to tenants, but not major driver. Major driver: haven't built enough housing of different kinds. Costs 2-3 times more to build same floor plan in California than neighboring states.
Climate dogma means onerous building codes: EV charging required in apartments/parking (reinforced floors, wider bays, fewer bays per structure); solar panels (taxpayer-funded for low-income, developers pay too); insulation, energy efficiency. Good intentions taken to extreme, making it too expensive to build affordable properties.
Private right of action under CEQA (California Environmental Quality Act): anyone can sue. 70% of CEQA lawsuits block housing, mostly filed by unions as leverage for project labor agreements (union-only closed shop, prevailing wage 2-3x market rate). Often fly in union workers from other states due to shortages, inflating costs with travel/accommodation. No CEQA equivalent in Texas. Fees: $30,000 per door in California vs. under $1,000 in Texas. Texas produces 3x new units per capita.
California's CEQA mandate: protect air, water, land. Texas lacks it, but Texas air/water/land not worse. Air quality roughly same (particulate/pollen counts). CEQA slows housing progress.
Data presented factually leaves little room to argue. California has highest rents, highest poverty rate, highest regulation, slowest housing growth in America. Why no confrontation by legislators? Answer: corruption and interest groups controlling system.
First policy area studied: ballot initiative to cap impact fees at 3% of construction cost (now 20%) and eliminate private right of action under CEQA. Failed to qualify. Pursued in legislature. Met Sacramento legislator called good on housing: said transformational, but couldn't support publicly because unions would hate it—removes their leverage. Waved arm: "The unions run this place."
Newsom's AB130/AB131: CEQA exemptions only with project labor agreements (union closed shop, prevailing wage)—writes back cost increases. Newsom donations over 16 years: #1 government unions, #2 trial lawyers, #3 non-government unions.
California has highest gas prices ($7-8/gallon vs. $3 elsewhere), higher than Hawaii despite abundant oil reserves. Fundamental reason: climate policies counterproductive. Importing nearly 80% oil since 2006 Global Warming Solutions Act. Fossil fuel use declined little (80% vs. rest of US 81%). Used to produce most in-state; now #1 Iraq, then Ecuador/Brazil.
Down to 7 refineries (from 40), built for California heavy crude. Iraqi/South American oil matches. Democrat policy expands Amazon drilling. Tankers use bunker fuel (most polluting). CARB counts emissions only 12 miles off coast.
Taxes add ~$1/gallon; CARB standard ~$0.61-65/gallon, rising. Most of $2 premium is regulatory. Remaining oil dirtier/thicker? No—fields could produce more. CalGEM (CA Geologic Energy Management Div.) denies permits (maintaining wells, sidetracking 5 to 100 barrels/day, new wells). Governor can appoint pro-energy leaders to issue permits overnight. Common sense: use our oil/gas while using it. Industry estimate: double production every 2 years.
Air quality improvements (LA smog down) from car technology, not EVs (4-5% penetration despite subsidies). Not carbon-related.
California spends ~$27,000 per student (nearly most of any state), gets worst results: 47% meet basic English/reading standards, 35% math (2/3 fail). Driver: teacher unions' grip on government school monopoly, driven ideologically (e.g., LAUSD demands: wealth tax, Medicare for all, Palestine).
Unions #1 donor to Democrats. Long-term: school choice (revolution in other states). Hard in CA due to union control.
Immediate fixes from Mississippi (1/3 spend, better results):
- Phonics for reading (most effective, barely used in CA public schools). Governor drives via state board appointments.
- Reading by end of 3rd grade benchmark: summer help, repeat year if fail.
- Accountability: grades for every school/teacher (public test scores assigned visibly). Reward good, remove bad.
Violent crime has declined over the long term in the US over the last 40-50 years, but California remains 30% more violent than the rest of the country. Major cities like San Francisco and Los Angeles release people for petty crimes under $850. Drugstores lock up everything due to property crime. Debates exist over numbers, with some claiming underreporting. Lived experience confirms increased property crime.
California excels at passing laws—1,118 bills in one session, stacked as high as a person's double height—but fails at enforcement. Legislature adds bloat, bureaucracy, and nanny state measures. Missing willingness to enforce the law applies to crime and homelessness.
Left's attitude subverts basic values; even as defund the police recedes, new terms like microlooting emerge, excused as social justice in outlets like New York Times and Slate podcasts.
Prop 47 legalized theft up to $950 but was overturned by Prop 36 in 2024, passing overwhelmingly at 70%. Gavin Newsom and most Democrats opposed it; resistance to implementation persists.
Crime is decentralized, handled by local police and sheriffs, but state actions drive issues. Jerry Brown started prison closures, accelerated by Newsom: prison places cut in half, budget doubled. Tens of thousands of violent criminals released to communities or transferred to overcrowded county jails.
Overcrowded jails undermine judges, prosecutors, law enforcement morale—catch and release is the norm. Law enforcement says "why bother?" Public stops reporting. Solution within governor's control: reverse prison closure program to increase capacity, relieve county jails.
Prisons enable accountability and rehabilitation. California has one of the worst recidivism rates; Virginia's is less than half. Serious rehabilitation needed: many prisoners can't read properly, have dyslexia. Ideology like decarceration, "prison is racist," blocks practical safety measures.
Newsom shut down four or five state prisons. Prison population peaked at 165,000 in 2006, now 93,000.
Resources: Golden Together (goldentogether.com) policy reports, including Ending Homelessness by Michelle Ste (runs homeless shelters) and Tom Wolf (recovering addict in San Francisco).
Three-Point Plan
- 1. Enforce Existing Laws: Homeless encampments are illegal. Ninth Circuit Boise ruling blocked removals without sufficient shelter, misinterpreted as $900,000 permanent supportive housing. Grants Pass v. Oregon (Supreme Court, 2024) overturned it—no excuse left. Governor can give local governments time, then use state law enforcement to clear streets.
- 2. Require Drug/Alcohol Recovery: Over 80% of homeless have addiction or severe mental health issues. Mandate rehab or jail. Democrat legislature passed Sober Housing Act (allocate homeless spending to sober shelters), vetoed by Newsom. Require 100% sobriety for state services.
- 3. Build Mental Health Facilities: Sheriffs report 50-70% of jail inmates have severe mental health problems—barbaric to treat them on streets or in jails. IMD rule (Medicaid, mid-1960s) blocks reimbursement for facilities over 16 beds, making it uneconomic. Trump administration offered IMD waiver; California hasn't applied despite available funds. Redirect money from homeless industrial complex (ridiculous apartments) to modern, large-scale mental health facilities.
Massive spending on homelessness breeds corruption and more of it; pay for something, get more.
Top-two system: Top two advance to general regardless of party—intended for moderation, but state shifted left.
Leading Republican polls; expects top-two spot with Trump endorsement. Ballots out early May. Likely vs. Democrat like Tom Steyer, Katie Porter, or Xavier Becerra—all no change or further left.
Argument: Happy with California's direction? More of same (Democrat) or change?
Not easy due to structures, but possible. Republicans won before (e.g., Arnold Schwarzenegger in recall, celebrity loved in LA). California vital: "California means to America what America means to the world."
Voter registration: Democrats outnumber Republicans 2:1, but actual votes average 60-40 split over 20 years (Republicans ~40%).
Key Factors for 2026 Midterm
- Wrong track at mid-high 50s (vs. mid-high 40s in 2020)—majority wants change.
- Estimated 11.7 million votes (average 2018/2022); need ~5.9 million to win.
- Trump got 6.1 million in 2024 presidential without campaigning in CA—votes exist even just from Republicans.
- Strong GOP turnout via voter ID on November ballot.
- Multi-racial working-class coalition: hammered by policies.
Tax Plan: No state income tax on first $100k, no tax on tips, $3 gas (Californi-able), cut electric bills in half, affordable homes.
One-party dominance causes dysfunction; balance needed. Nothing to lose in current mess.
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