How Matt Mahan Thinks He Can Save California
In a Nutshell
Matt Mahan, San Jose mayor running for California governor, blames the state's crises—skyrocketing spending ($150B more in 6 years) with flat/worsening outcomes, #1 poverty/unemployment/homelessness, unaffordable housing/energy, failing schools, and pension black holes—on misaligned incentives, bureaucracy (e.g., $14B high-speed rail black hole, CEQA lawsuits), union influence, and performative politics lacking accountability. His fixes: veto wasteful bills, enforce zero-based budgeting with public dashboards tracking outcomes (e.g., cut unsheltered homelessness 33% in San Jose without tax hikes), slash regulations/fees to boost housing supply >100K units/year, mandate involuntary treatment for addicts/mentally ill harming communities, reform pensions via defined contributions, innovate energy without killing refineries, and pursue pragmatic immigration (secure borders + legal status sans voting rights). Democrats must prioritize results over revenue hikes or risk MAGA backlash; Mahan offers data-driven governance from his tech/civic background.
These notes were generated by AI and may contain inaccuracies.
Matt Mahan grew up in Watsonville, California, a farming town where strawberries come from, in a working-class family. Mom was a teacher, dad was a letter carrier. Got into a great college prep high school on a work study scholarship, took buses two hours each way. Worked through high school and college, returned as a public school teacher through Teach for America. Entered tech sector, spent a decade building civic tech tools. Involved with early Facebook app Causes, then started Brigade, like LinkedIn for voters, to connect voters around issues, organize grassroots power, hold elected officials accountable. Company acquired, then ran for San Jose city council, knocked on 10,000 doors.
Residents asked: "If I'm paying $20,000 a year in property taxes, why haven't my local roads been paved in the last 15 years?" State spending increased 75%, $150 billion more this year than six years ago, but outcomes flat or down, not 75% better. Not a money problem in Sacramento, but incentives and structure problem: shoveling money into things that aren't working. High-speed rail: 20 years, $14 billion spent, no product. In startups, people would be fired. Lacks accountability.
Contractors, lawyers, some into building belatedly. Endless process: years of environmental review, litigious environment. Anyone can sue under CEQA, even non-residents. Years of litigation, bureaucracy. Housing: one-time city fees add 20% to project cost. Bureaucratized to paralysis: spend more, get nothing. Taxpayer pays 53% tax rate (federal + temporary California tax for 11 years), 53 cents of every dollar. $14 billion on high-speed rail: no rail. Consultants for environmental reviews, studies, reports, litigation costs, design, right-of-way, community engagement. Vacuumed up into sea of little groups, no grandmaster thief. Fraud: $30 billion in pandemic unemployment claims. Emerging: hundreds/thousands of hospice providers that may not exist. Bigger: waste, inefficiency, growing headcount, programs, nonprofit grants, funding process not outcomes.
In San Jose, without raising taxes (revenue slowed due to cyclical economy, struggling real estate, dependent on property taxes), led state in reducing crime, safest big city in country. Reduced unsheltered homelessness by a third. Unblocked housing: thousands of new homes under construction. Changed process, reduced fees, cut funding for ineffective programs to fund efficient solutions.
California legislature passes hundreds of bills yearly, all from one party (Democrats). Gavin Newsom vetoes 15-20% average. Measure of success for legislators: how many bills written, passed, signed. Bills add cost/process. As governor, Mahan would veto more. Tell legislature: won't fund failure. Publicly set goals, measure every dollar's performance, audit programs. 75% of state auditor recommendations unimplemented. No feedback loop/accountability. Performative politics, empathetic to everyone, be everything to everyone. Priorities: high housing/energy costs, public schools quality, neighborhood safety. Despite 75% spending increase, outcomes not better, some worse.
Less government often solves better than more. More government on housing/education makes them more expensive. Opponents like Eric Swalwell say top priorities: revenue, revenue, revenue. Democrats must own outcomes, stop reflexive "more revenue" answer. As San Jose mayor (largest city in Northern California), lower revenue per capita (bedroom community, Prop 13 slows tax revenue growth, ~1/3 less than neighbors), yet huge increases in sheltering, housing, crime reduction by thinking differently. Set public goals for accountability. Elected officials avoid goals to evade election criticism. Pass bills showing action, often unintended consequences make things slower/expensive.
Not afraid to take on organized interests. Public sector unions biggest spenders in Sacramento on advocacy/lobbying/elections. Also trade associations, doctors, dentists, oil/gas, tech organizing late. Well-resourced groups defend status quo. Unions pragmatic (e.g., building trades want economy growth), but spineless politicians cave to demands. Teachers union resists accountability, evidence-based curriculum, classroom tech. Elected officials must push back for community good. Mississippi/Louisiana outperform California in low-income kids reading on grade level. System responsive to organized interests over people.
Incentives wrong: cater to organized interests spending on elections, draft bills/amendments. Running against system for high-functioning government: lower housing/energy costs, better schools, safer neighborhoods, end street homelessness. Have resources, lack political will/accountability. Non-partisan. If Democrats don't deliver, pendulum swings to MAGA-like movement in California.
#1 poverty, #1 unemployment, nearly half nation's homeless in California (per capita debatable). Road to hell paved with good intentions, but unwilling to use data when things fail. Broken housing market. Lax on addiction/mental illness cycles: deluded into thinking leaving people to suffer/die on streets protects civil liberties more than intervening. 50,000 died on California streets last decade (~half overdose/suicide), behavioral health issues, watched deteriorate. In San Jose: shifted from $1M/door new apartments to $85K sleeping cabins on public land (2,000+ shelter beds added in 3 years), led state in reducing unsheltered homelessness. Overcame opposition from advocates, developers (well-intended/self-interested). Commit to solving or cave to interests/ideology.
San Francisco managed alcohol program: free alcohol to addicted unhoused. Disincentivizes recovery, incentivizes coming to SF (needles, free alcohol).
Fundamentally supply problem. Austin/Seattle/other markets: remove barriers, market builds to demand, slows cost increases (Economics 101). Also impossible to build affordably: zoning, high fees, cumbersome building code, litigation (like high-speed rail). No condos due to construction defect liability: trial lawyers sue in year 9 (e.g., bubbling paint) for fees. Trial lawyers (highly organized) push back on changes. Litigation sizable % GDP, largest donors in state elections for favorable frameworks, multi-billion industry. California extreme: cities settle high trip/fall suits, can't afford sidewalk maintenance, more suits. At risk of trial lawyers suing state into oblivion. Condos: traditional first rung for young homeowners/equity, now cost-prohibitive, no financing/insurance.
Fair to say regulation crisis, not housing crisis: bureaucracy, codes/laws for special interests.
Adam Carolla called it gynofascism: feminine safety/protective origin in regulations, everything safety/more regulation, can't build, lawyers sue.
Easier to add rules/process after negative stories. No incentives for performance/outcomes, default to performative adding rules/fees/checks. Greater temptation at state level vs. local.
Matt Mahan criticizes the performativeness of showing activity without impact and wants to help voters analyze elected officials' effectiveness. He ran on public-facing dashboards showing baselines, comparisons, goals like reducing homelessness by 10% year-over-year, reducing crime, removing barriers to housing, and speeding up permit reviews. He prefers feedback from voters he knocked on over interest groups opposing change.
Ultimate outcome: build more housing more affordably by pulling costs out of building. California can't compete when Colorado builds the same home at half the Bay Area cost. Goal: more housing in absolute terms; production dropped from 150,000 units/year historically to 100,000, now 80,000. Target: well over 100,000 units/year. Better metric: ratio with jobs—for every two jobs, need at least one home. Bay Area/Silicon Valley created 8 jobs per new home over 20 years, causing unaffordability and displacement. Avoid arbitrary targets like 10 million homes; focus on year-over-year increases and pulling back fees, timelines, complicated building codes. Each gets a metric; per square foot cost must go down.
Costs vary by product type and market; need to lay out baselines. Modular factory-built housing can reduce cost per unit by 20%, speed timelines by 50%. Regulators can drop per square foot cost by at least a third.
Governor levers: budget process, veto, bully pulpit, naming/shaming, executive orders, appoints 3,000 people to commissions with regulatory discretion. Needs legislature for change, but many Democratic legislators privately admit system is broken with backwards incentives. As governor, change conversation, persuade or elect different legislators. Legislators hesitate publicly due to donor loss in money-driven state, but social media lowers barriers to go direct to voters.
You're a corporate sellout. You're racist. You're whatever. I mean there's always some label that people will ascribe when you try to fight for change. But I try to stay laser focused on the real world outcomes. Housing costs, energy costs, quality of schools, public safety, the things that people care about in neighborhoods like the one I grew up in. That has to be the north star.
Broken housing market primary; cheap/widely available housing keeps people indoors despite addiction/mental illness. Lifecycle: vulnerable people hit by job loss, health issues, addiction, mental illness, domestic violence. High $3,000/month rent means one medical bill/layoff leads to car-living; working Californians lack savings. Macro costs: highest housing, second-highest energy, highest gas prices hit working people; poor education for future jobs creates fragility.
Public policy failure: fewer shelter/treatment beds than other states; lead nation in unsheltered homelessness (40% of U.S. tent-dwellers in CA, 12% population). Homelessness should be brief, indoors; need rapid rehousing, case managers, tools, accountability.
Yes to involuntary holds for repeat refusers harming community (vandalism, retail theft). Battle in downtown with addicts/mentally ill breaking windows. Offer dignified low-barrier indoor placements (2,000+ in San Jose: individual rooms with locks, allow partners/pets/possessions). Two-thirds accept; one-third too deep in meth/fentanyl can't decide rationally.
It is not compassionate or progressive to leave them to endlessly cycle between streets, emergency rooms, jails, and ultimately die of an overdose. I think we have a moral duty to intervene, help them detox and get connected to a counselor and give them a chance to turn their lives around.
Local police (1,000 officers), firefighters, social workers on front lines; federal tools, state National Guard, CHP. Reduce demand via intervening in public drug use, treatment, accountability—recovery removes customers. Prop 36 (first Democratic mayor to support): third public drug offense offers treatment or incarceration. Cycles scale up; public use imposes community costs (business closures, unusable parks). Direct/indirect harms critical.
CA gas $5.50/gallon vs. $3.50 rest of U.S.; ~70 cents/gallon tax. Policies chased Chevron to Houston, shut largest West Coast refinery. Regulatory approach wrong; innovation middle path. Texas provides cheaper, cleaner power than CA. China invests in solar/wind/storage/EVs.
Refineries regulated out: lost cleanest/highest-paying jobs, tax base; still import same oil/gas from afar (dirtier, bigger carbon footprint), worsened climate/economy.
Smarter: pay EV owners to charge midday (excess solar, sometimes pay AZ to take it), plug in evenings for 5-9 p.m. peak avoiding gas plants. Invest in innovation/infrastructure, not regulate out needed sources.
Gas tax most regressive (worse than sales tax; wealthy on EVs avoid it, hits working families like Watsonville). Proposal: temporarily suspend for war relief; general fund up 75% in 6 years ($350B state budget can pave roads). Long-term: EV user fee for road maintenance.
Wildfires destroyed LA areas; insurers fleeing (speaker lost coverage near trees). State creates unaffordable insurance pool needing bailouts.
Strategy:
- Rebuild private market (90%+ homes): allow appropriate risk pricing, granularity (e.g., remove trees within 100 ft for lower premium).
- High-risk 5-10% (hilly/wooded): limit new builds, require fire-resistant materials, higher insurance.
- State ownership of vegetation management ($8 fire response/recovery per $1 prevention); clear state/federal lands near urban areas.
Toured Altadena/Palisades: unmanaged 50-ft vegetation hinders rebuilding; no quarterbacking. Create governor task force for insurance market. State rate-setting chases insurers out; let market set rates for competition/lower prices. Incentivize best practices for premium reductions; public option for riskiest, not forcing all to subsidize.
~3M public workers; ~$1T funds; 7% annual returns vs. S&P 11%. Shortfalls: $250-300B to $1T. Can't rescind promised benefits (Supreme Court). Taxpayers liable.
San Jose canary: pension reform as unfunded liabilities ate general fund (19% this year, 1/5 off top). Politicians ignored math.
Options:
- Defined contribution (employer/employee pay in, market growth, track account, adjust contributions).
- Politically hard; San Jose roadmap for new employees: higher upfront pay-ins, realistic returns, adjust faster if underperforming, better incentivized managers, 50/50 gap coverage (taxpayers/employees) if short.
Messy process (ballot, lawsuits); needs better handling.
San Jose's pension reforms, despite legal and political limitations, established a 20-year glide path to pay off unfunded liabilities for tier one employees. By the early 2040s, San Jose will clear the debt, freeing up the general fund for increased staffing and service levels. Costs peaked today after taking tough measures, with gradual improvements each year.
California's budget grew from $110 billion 10 years ago to $349 billion proposed this year—over 3.5x increase—despite flat population. Spending rose 75% in six years while state employee headcount increased over 20%. Despite highest tax rates and largest revenue base, a $35 billion deficit persists.
Increased public sector pay, pensions, and post-retirement health benefits outpaced affordability without honest accounting. In good years, new programs and headcount are added without outcome focus. Programs lack premise of needed outcomes and efficiency. California needs zero-based budgeting: define outcomes, optimize spending, rather than annual 2-3% headcount increases and 4% raises.
Electing a pragmatic, independent governor is step one but insufficient. Build moderate legislative coalition willing to tackle issues. Governor drives budget process, has bully pulpit, appoints 3,000 agency leaders. Appointees should ground truth at local levels (school boards, cities, counties), reform systems for better outcomes, or be replaced. Shift from process-oriented to outcome-accountable mindset.
Single state-run free healthcare for all is unrealistic. Reduce costs via price transparency and competition (5-10% savings), incentivize preventative care, get 100,000+ off streets into shelter to ease system burden, expand nurse practitioner roles for upstream preventative care over emergency room reliance. Invest in innovation to bend cost curve, not raise taxes for unsustainable free services.
Wealth tax violates private property rights after taxes paid; enables asset seizures. Half of known billionaires have left California, with over $1 trillion capital flight lowering future revenue. It hurts middle class and working families, not mobile billionaires.
Address economic inequality (threat to democracy) and declining social mobility without wealth tax. Close loopholes: adjust capital gains rates, end borrowing against appreciated assets, eliminate step-up in basis at death (e.g., Elon Musk passing $500 billion untaxed stock to children, rebased at market value). Capture billions ethically.
Fix policy failures: underperforming public schools, unaffordable housing (most spend >1/3 income, many >1/2), unaffordable energy. These hit social mobility harder than tech growth.
Take inequality and mobility seriously. Demand tech sector and wealthy structure for shared prosperity, direct benefits/equity from tech gains. AI scares due to job loss/wealth concentration, but will create thousand-fold new earning ways (like Instagram, Shopify, Etsy, TikTok), accelerating mobility. History shows tech change hard short-term but abundant long-term. San Jose offers AI upskilling, company training in libraries to lower barriers.
Public education must teach critical thinking, curiosity, questioning, agency—not rote facts (now in AI). Half of kids not on grade level in reading/math hinders lifelong learning.
Not a fan. Channels working Americans' frustration but creates fear/division on immigration, ignoring long-term residents (20-30 years) working, paying taxes, raising US citizen kids. Opposes war in Iran (blunder driving energy costs, American lives lost). Supports targeted tariffs on China's unfair competition over broad inflation-causing ones. Worries about democracy: needs honest dialogue, rule of law, independent judiciary. Trump's reactionary rhetoric from government trust decline; matched by left populism. Offers pragmatic third way as Democrat recognizing broken incentives favoring organized interests over people.
Newsom bulwark against worst legislative ideas, vetoing 10-15% of bills (many avert harm). Critique: not enough against entrenched interests. Disagreements on Prop 36, recovery housing, energy policy. Attack problems, not people. Newsom did good things (Care Court right idea); appeal to collaborate for faster change, execution (ensure Prop 36, Prop 1 deliver on addiction/mental illness).
Understand Newsom's mirror-holding, Trump-mocking for values fight and presidential run. As governor, fight via courts/bully pulpit to protect values/funding. Seek win-wins, e.g., expedite $40 billion federal aid for Altadena/Palisades fire rebuilding (10,000+ homes lost); hyper-partisanship delays help.
Represents them unless committing serious/violent crime (deport those). Many tacitly welcomed for low-cost labor in agriculture/construction, now families with US citizen kids. Practical/ethical grand bargain: secure border, deport violent criminals, pathway to legal status (citizenship if possible) for rule-followers. Disappointed both parties kick can. Secure border, lawful immigration forward; protect humanity. Minneapolis shows citizens harmed/killed—not working, unethical.
[Notes end cleanly before pushback response]
Growing up in a town historically about a third undocumented, the primary incentive for parties not to solve immigration is that industries profited from low-cost abundant labor. Construction and meatpacking industries, donors to the Republican party, benefited. Both Democrats and Republicans have been complicit, playing to their bases and politically incentivized not to solve it.
As a pragmatic moderate, both sides are wrong but have truth: Republicans are right that we should know who enters and exits the country, have secure borders, remove incentives for illegal entry amid fentanyl crisis, international terrorism, and smaller nukes. Border security is essential. If not here lawfully and committing serious violent crime, deportation is minimum expectation.
Both parties complicit; instead of divisive electoral or economic games leaving millions in fear and shadows, fix it. Legal status without right to vote, perhaps green card. For compromise and problem solving, both sides must give.
I think that's the best idea possible for how to solve this, which is a path to residents without a path to voting. And that that could solve everyone's concerns.
Other leading Democratic candidates—Swalwell, Steyer, Porter—vying for more-of-the-same lane: platform says answer to problems is more revenue, revenue, revenue as Representative Swalwell's top three goals.
Offers different approach working in Northern California's largest city: getting back to basics, focusing on fewer foundational things for opportunity and quality of life. Humble about government capabilities, not every problem solved by more revenue and programs. Radically transparent and accountable on spending, rooted in measurable outcomes. New politics of pragmatism antidote to destructive populism on right and left risking democratic project.
California historically innovative state leading the world; hopeful Californians ready for problem-solving politics. Jumped in race because others across spectrum in for a year, not speaking honestly about problems and solutions. Unique voice resonating on short runway.
Travels state: Tijuana River sewage crisis shutting beaches, Altadena, Tenderloin in San Francisco. People respond wanting tax dollars used responsibly, government to work, life improve with high taxes paid.
That's my commitment.
Mayor Matt Mahan thanks David for All-In podcast, good luck in governor's race. Thanks enjoyed it.
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