CA Governor Candidate Steve Hilton on Why California is Destroying Itself & How a Republican Can Win

We're very lucky today to have a candidate for the governor of California

“who is extremely unique in a number of ways.”

First of all, he's a Republican.

And second, he's a Brit. Welcome to the program, Steve Heldon. You've decided to increase the degree of difficulty in two ways. But you're polling fantastic. You've got five or six people in the poll.

So he's leading the field. You're leading the field. Obviously, it's going to get narrowed a bit when the Democrats ship a couple more people and get them out of the race and then pick their eventual winner in their cobble.

Whenever that happens, when Nancy Pelosi picks his running. But Steve, maybe you could start fighting. Sorry, guys. I got jealous. But Steve, maybe you could introduce yourself a bit

and tell us why you're running. Well, how could I just offer that great intro where you just tried to kill my chances in just a couple of words? Thanks a lot, Jason. Really appreciate it.

Let me ask you to say, I've known you since 2012, 2013, when he and his wife Rachel Watson moved to Silicon Valley. Rachel worked at Facebook initially. And then she worked with you, Jason, at Uber. And then has had a great run and then Steve, similarly.

And you set it in a funny way.

But ultimately, this is an incredible land of immigrants.

And Steve has a really compelling story. So before we jump into the questions, I know you're back around Steve, but I do think it's important. Go back to your parents, your mom, how you grew up. And just set the stage for how you made it out

“from the way you started, because I think that's important.”

And then how you got to the United States and why. Thank you, thank you. I appreciate that. And you're right, we've known each other a long time now. And it's a great joy to be here.

By the way, just want to say it's a great joy to be on a show where I don't have to wear the suit and shirt. And that's one of the things about running for governor. I'm loving most of it. But dressing up is not the favorite part for me.

So it's great to be with you. I thought for this show, we've got to get it right. I think that the more I think about my background, the more I think it is really important in terms of how I see things and what I want to get done, my parents are Hungarian.

They were refugees from communism and I grew up in England in a town called Brighton on the South Coast. And we just had a regular working class immigrant aspirational family story. I guess, my parents actually split up when I was young.

My stepfather's also Hungarian. He had an amazing story. He was a refugee as well, but literally ran across the border. He grew up in a small village on the west side of Hungary in the 1956 when you had the Soviet invasion.

And he tells this amazing story.

They heard on the radio. The Russians are coming. And he and his brother and some friends from his school. He was 14 years old. Like one year younger than my younger son, Brighton now.

And they just ran. They literally ran for this right. We want our freedom. They ran to the border. Bob wife fences, mine fields got shot up by the guards all that.

Half of them were killed. And he ended up in a refugee camp in Austria and from then to England. So all of that, I guess, just gives you that sense of real appreciation for freedom, for freedom and opportunity. And I grew up in England, work very hard ended up at Oxford University.

But my first job was project manager for a construction company. I just wanted to earn money. I just wanted to get out.

“I think that's exactly the right phrase that you used.”

And that's been the story. And after Oxford, I went to work for a little bit of the conservative party in England. Then I worked all over. I worked from out big ad agency, worked all around the world, started my own business. A couple of offshoots of that, including a couple of restaurants.

Then we're back into politics when my friend David Cameron, who I'd met many years before, had gone into politics, got elected to Parliament. I helped run his campaign for the leadership of the British Conservative Party, won that election. And then, with him to get the conservatives elected when he became Prime Minister in 2010, joined him in ten-downing street.

I've seen revised it to the Prime Minister, most of my job was really focused on trying to implement our reform program. And then in 2012, that's when we met, we moved here because Rachel actually before Facebook she was at Google. And she had this big global job at Google, she was running comms and public policy for

Google Worldwide. I had my job in number 10. Because actually, when our second summer was born, it just was a lot, you know, the travel for her and the time difference. So that's why we moved here.

And I don't know. Should I stop there? What do you want to be to keep going? But you're so notably, you became naturalizer of citizen of the United States now. So you have dual citizenship, less people are confused by the accent, running for governor

and you're a citizen of the United States. Well, let's talk about your political setup.

version of what the role of the state is versus what the role of the family or the individual is, then growing up in the UK, I'm sure your attitudes either get cemented or changed. Give us the setup. What is the political evolution of Steve Hilton? What did he believe?

And then what does he believe now and what has shaped these beliefs?

It's really, I think it goes back to just the round that when I first really started thinking

about it. All it was just as Margaret Thatcher was coming to power. And you'd had the 70s in England or a disaster. And a decade that was just the economy was completely stagnant and slurotic. Unions, ran everything.

There was this period called the Winter of Discontent in 1979 when you had massive strikes, you know, the dead went unbearade and trash was piled up and just real collapse of everything.

“And that's what Thatcher came in to fix.”

And I really did identify with that as well as with the very clear stand against communism. And so really she was, if only when I was thinking about the video that I made to launch my campaign about a year ago now, we ended up putting that in there and I thought, well, actually that was the thing that got me going. I was totally inspired by her, but also the focus that she had on business and enterprise

and hard work. And remember why stepfather, they weren't a tool political, by the way, it wasn't like some household where we talked about politics, it really wasn't. But he had this thing that stuck in my mind when he talked about the like in England, you got the conservative party equivalent, the Republicans and for the Democrats, it's

the Labour party. And I remember he just used to say, Mrs. Thatcher's for the workers and Labour for the layabouts. And I just fray stuck in my mind about the importance of work

“and hustle. And I think about that all the time, where do you think California is, you”

can trust? Well, this is, this is why I was just about to get to is we really are there. There are so many things I see in California today that are exactly like the UK in the 70s. You've got the massive dominance of the unions in policy making, you've got a slurotic economy, you've got massively high taxation. I mean, it was higher than the, at one point, I think the top rate when you add in the wealth taxes, the UK was literally 98%. But you had that

confiscatory taxation and top rate of 60% and so on. So, very, very similar. And actually funny enough, somewhat might, might Moritz actually sent me a report that someone had done about the UK today. And again, there's just these eerie parallels with just how impossible it is to do anything in the UK to build anything, the overregulation. When I read this report, it just is exactly like California today. By the way, one thing Jason, just to be clear,

I am a proud American now, but I'm not, I actually renounced my UK citizenship and I did that, because I just wanted to be clear that I'm just to borrow the title of this show. You want to let me

“all in. Oh, literally. I think it's really important, everyone knows that. And I am.”

And you have some to get into some maybe some policy, thanks for the background there. You have some unique policy positions. Taxes, I think, is the most unique. And dare I say, pretty populist. You want to have no state tax in California for people with under $100,000 in income and then a flat tax for everybody over 100k, but 7.5%. How is that possible? And is that something you've studied and where did this come from? The tax plan that I put out

there, that was the first day of my campaign, I think of it as pro work and pro growth. And I think

we need both of those things, because if you look at what's going on in California today, just big picture, obviously you can look at the data that's a real economic disaster. I'm not sure people appreciate just how bad things are, because hiding behind that data point of having the fourth largest economy in the world, which is true and obviously I'm proud of that, I want California to be big and successful and growing. But that fourth biggest economy data point, and I need that,

you've got this with the state with the highest unemployment rate in the country and the highest poverty rate in the country, tied with Louisiana, his own United Way report, just the other about a year ago, they do it every two years, sort of an assessment of living conditions in California.

And they found that over a third of California's cannot afford to meet basic needs.

And so the starting point for my tax plan is what can we do quickly to help people who are

being taken care of by the welfare system, they're working incredibly hard, but they're being squeezed by all these costs we have the highest gas prices in the country as you know the highest electric bills ever except for Hawaii, housing costs the highest in the country,

“insurance, all these costs are so high. So what can you do to help working people quickly?”

And so the starting point was, and what's affordable, the $100,000 mark, I remember when we I was just playing around with numbers actually, I did it with some economists from the Hoover

institution where I was a fellow. The first couple of years that we moved to I taught at Stanford,

including in the public policy department also at the D school at Stanford, but I was also fellow at Hoover. And so we did the math on the tax plan there just about a year ago. And so that first part, first 100 grand tax free, actually in many counties in California today, the official definition for low income is 100,000. So that number may sound very high to people in other parts of the country. It's actually the definition in a lot of counties of low income. So

you've got people earning 70 grand 80 grand 90 grand in California. They are paying 9.3% state income tax. That rate is higher than the top rate in most states in America. So to me that's ridiculous, when you've also got all these other taxes that those exact people are paying sales, tax property, tax, gas tax, all of those are the highest in the country. Cutting taxes,

“this significantly means you have to then also cut spending. Yes, I just went to the other”

process. Yeah, I just did the other part, which is the 7.5% flat tax. I just thought, you know, when you look at the the the facts about economic performance, the fact that, you know, for example, chief executive magazine, Ranksis, and has done for the last 10 years or so, the 50th out of 50 for business climate, a big driver of that is tax. I'm sure we'll get into the the insane proposed billionaires tax and, you know, all these things that are driving wealth creation out of

our state and business investment out of our state. So it's not enough just to take care of would give some relief to people who are on the lower end of the scale. You've got to actually have a pro investment pro growth tax framework. And so part from letting us the complexity is ridiculous of our taxes and these endless different rates is ridiculously complicated. And that itself is

“a cost, the bureaucracy and hassle associated with that. That's why I think a flat tax makes”

sense. Remember, it's in, you know, in the context of federal taxes, all these other tax, it's not the only component. But the cost is to get to that cost. You've got to reduce spending exactly as you say. And basically, the cost of that in total is about an 18.5% reduction revenue,

which takes us back, which takes us down about 60 billion something like that, which is not even

going back to what the budget was just before the pandemic. They've actually docked, if you look at the budget of the state of California, it's nearly doubled in the last 10 years and last five years, it's gone up, so like 75%. And so this is just bringing the budget back to achieve that entire tax cut would bring the budget back just to where it was roughly before the pandemic. Let me just summarize. So if you make between zero and $100,000 a year as a California resident

under your plan, no tax, no state income tax. No state income tax. If you make $100,000 in a dollar and above, you pay $7.5% flat tax. Yes, that's the concept. Okay. How many Californians does that impact? So what percentage of the population now get that affordable? If you were to

be civilian, how the tax numbers usually only households, and so it's about 7 million households,

would benefit from the under $100,000. And do you know how many that is as a percentage? Well, working house, we got 40 million people. I think that's about probably just over 3rd something like that. Okay. So a third of homes now essentially go to zero tax. Third income tax in there. If we then take a dollar for dollar from the operating budget, programs will suffer. And to your point, your comment is, I'm putting words in your

about, but you've filled them in. Well, not really because we're just going to go back to 2019, 2020 budgets. And the difference was we spent a dollar in 2020. We now spend $2 and nothing has changed. So go from $2 back to $1.50 and everything should be fine. Is your point? Yes, and I'd actually go further than that. So first of all, what we've seen happened to the budget is basically the expansion that we saw in the pandemic and after, is gone baked into the baseline, which is totally unsustainable.

to a more reasonable growth in spending because you go bankrupt. As we're seeing with these deficits that we're getting even in times when we're not in recession and taking money out of the reserves, out of the rainy dame fund to plug the gaps, which is what they're doing totally irresponsible fiscal. But actually it's more than that. Even if you don't change anything in the composition of the spending and just get back to where we were, that gives you scope for a major reduction in

tax. But the other part of it is what we're discovering in terms of where the money is actually going. And so obviously the whole fraud story has exploded as a national political and economic story ever since Nick Shirley's first investigation in Minnesota just around the time of thanks giving last year. Well, we've been making our own contribution to that. So a few months ago I set up our lecture called it, how don't California Department of Government efficiency. I know

that's a controversial brand. But you know, then the idea of it, efficient government is something

“I think everyone would support. So I don't why not use that because everyone knows what it is.”

So we've been, you just looking at the published data on spending to find examples and to make an estimate of the total amount of fraud waste and abuse in the system. And we've now published four separate fraud reports out of Cal Doge. When I say we, by the way, it's, I mean, this is a longer story we can get into. But one of the ways I think I'm running this campaign differently is that I'm actually putting together a team before the election of, in terms of others who

will run with me for statewide office because you've got some very important positions alongside

the governor that are going to be crucial in putting us back on track. In this instance, the state

control is very important because the state controller is an elected position, it has the legal power to order any organization receiving state money and to stop the flow of money if there's any suspicion of improper spending. So there's guy running with me called Herb Morgan and we've been doing this work together. And we've published four reports now. Three of them on individual examples

“of fraud. We can get into that in a second if you want to know some of the examples are really”

shocking. And then the fourth one was an estimate of the total. And we just went through published data from the state auditor from Medicaid error rates and so on to make an estimate of the total number. What did you find? I've given a couple of examples. Here's some specific examples.

The second fraud report with a classic one billion dollars over the last ten years,

100 million every year since 2015. This is from the climate change mitigation fund which is part of the cap and trade system. This is actually gas taxes and surcharges on electric bills and so on. 100 million year was allocated to be spent on climate change mitigation. In this case it was solar panels for low-income apartment buildings. So actually track that money and with an AI partner that can get all the reports. And of that one billion total in ten years, the actual amount spent on the

purported benefit here, solar panel installation was 72 million. 928 million actually went to non-profits doing all the usual to democrat associated bullshit. Frankly, voter registration, environmental justice campaigns, all that kind of stuff. The actual thing was mostly spent on

that. That's one billion dollars. Of the first one was the cannabis tax proposition 64

legalizing cannabis. There's a tax associated with that supposed to be spent on substance abuse prevention. We found 350 million dollars that were supposed to be spent on substance abuse prevention again going to this network of non-profits over 500 of them and small individual crafts. When you look at what each of those organisations does, it's all the usual stuff, voter registration

“activism. So the third one was project home key that we looked into which is the homelessness thing”

that they set up after the pandemic, which is buying up property for homeless people and sometimes can building new property for homeless people or converting hotels 3.8 billion. That was on that one that we found. I mean, others have found other amounts. Most of which went into the pockets of developers without any real to California budget, if I'm not mistaken, 350 odd billion. Three hundred and forty nine this year. What percentage of it in your best estimation with you

in your team do you think is inefficient fraudulent wasted? Well on number over the last five years,

certain brown, you know, 20%. That's something. Now just to bring some reality to the situation,

you would have to get through the legislature, which is both control by Democrats. You can't unilaterally as the governor, just say, hey, we're cutting these services. And we had a governor, Schwarzenegger, who tried this very thing. He had to move to the center. You of course,

“I believe in California have a line item veto. So you have some balance there. But this is fantastic”

for people to maybe get a reprieve from taxes. You're going to get a major fight with Democrats to cut any spending. What's your plan there if you were to win? So Jason, a couple of things. You're right about that. And I'm very thoughtful about the realities of these things.

And I always make clear that I think it's certainly on the tax plan that tax is definitely

you can't do that without the legislature. I think that actually we'll get a possibility of a consensus around some of these items where we can actually work together with the legislature to make it happen. One indicator of that is actually one of my Democrat opponents in the governor's race, Katie Porter. Actually, you know, we were doing a debate the other week in Fresno and she just said, we've talked about affordability or whatever. It wasn't Chevron. I'm

to say, I'm stealing Steve Hilton's tax plan. I agree with him. First, Andrew Grant tax free.

“And I think we should take good ideas where we find them. So this is an interesting example that”

I think that that part of it, I think we may be able to actually persuade the legislature to do. And I notice she yelled at you and said, get the hell out of her shot. Exactly. It's a stronger word than eight exactly than hell. The attitude that I've got on that whole question of the legislature is that when I'm elected, that's, and I'm sure your eyebrows are raised and saying, what are you talking about? It's impossible for Republicans to win and we're

getting into that. But I'm doing this on the basis that I will. And I'm preparing to actually start implementing the big changes we need to make in a thoughtful manner on day one, because otherwise what's the point of doing this? Steve, do you think that there's legislative agreement or momentum to give you the win? Even though, to your point, I think it's quite significant that the Democrats would signal that it's a legitimate policy proposal. But do you think that if you win,

people would see the force from the trees and realize how important it would be to take salaries under 100,000 to no state income tax? Look, I've seen the Democrat arguments now up front and many, many times we've done a lot of events together, some of the televised debates, many more than aren't televised. We literally all saying the same thing. All the debt in terms of

the diagnosis of the problem. It's incredible expensive to live here. People are really struggling.

The business climate is a disaster. We're massively over-regulated. We can't build anything. Everything takes too long. Everything's too complicated. There's a real consensus about diagnosing

“the problem, among all the candidates. I think that that doesn't mean that we agree of course”

on the solutions. I would argue that the Democrats are in a some version of more of the same, actually, despite what they say about the problems. But I think that there are certain things where we will be able to get agreement. I also think that when you have a situation where you have the first Republican government elected for 20 years, that really will change the dynamic and sacramental. I think it'll, it actually may, we've got some things losing things up a little bit because

I think that there are people there in the legislature who really understand that things have gone to find some of them have said it to me personally, Democrats there. But they feel constrained by the current political situation, the machine being in control, they can't really move and I think that'll shake things up a little bit. That's one point. Secondly, I really do have experience working across party lines like this. I think that I'll be able to bring some of that

into play. I mentioned earlier. I worked in contending street senior advisor to the Prime Minister, he was a conservative prime minister, but it was a coalition government. And I literally shared an office in contending street with my opposite number from another party. And we would, you know, to hash things out on our unit, you know, we were part of the team that negotiated a coalition agreement and then tried to implement it. And I think that those skills of actually putting something

together where you don't agree about everything, but you can make some things happen. And you'll be useful in this situation. And I think we can, I mean, look, everyone agrees we can't go like this

to two terms, Schwarzenegger to two terms. That's 16, I guess, of the last 36 years. It is completely

“conceivable that a Republican could win. And you and Katie Porter have the same plan. I think”

Chad Bianco has the same plan, which is under a hundred thousand, all of you agree no taxes. That you're all attacked in affordability. They don't believe in cutting services though. They want to increase taxes on businesses if I'm correct. And so why is that plan not as good as yours? I guess is the question in which one do you think will be more appealing to the voters? Would the voters, I think the law all agree paying with taxes, fantastic. Make sure more

competitor with Florida and Texas. But if they had their drivers, they're probably going to want to see Google and Apple pay more in taxes and not lose their services. But we're losing jobs. And I think that that's the consequence of the squeezing businesses and high earners more and you're seeing it right now. You're seeing the business exodus. If the billionaire tax proposal

“goes through, I mean, that absolutely puts, you know, I think that's just complete disaster for”

for the tech ecosystem and what we've built in Silicon Valley over the years and all the job creation and wealth creation that comes with that. You're seeing, I mean, I just, it's not just tech everywhere you go in this state. There are so many conversations you sit down with business people. You know, we are on the brink of leaving. I don't think people realize quite how near the cliff edge we are. And it's, I give you another example, we are just in Pomona, the other day

down in Southern California, fantastic companies, sheep metal is an HVAC doctor manufacturer. It's exactly the kind of thing you'd want to get. They union jobs actually to create, you know, manufacturing facility. They are making the HVAC systems, the air condition, incredibly important as, you know, for TSMC and these semiconductor factories and all these high end manufacturing that's happening in other states and these facilities now massive amounts of investment in the AI economy and

intact more broadly. But none of its happening in California. I mean, we just published our policy report on that today, how we can get some of that full stack of those jobs in California. But that company literally said to me, since the facilities are all now being built in other plate and other states, we're on the brink of moving our facility to be closer because what's the point of making this stuff in California is not going to be used because nothing's happening,

“nothing's going to be happening in California. So you have to stop this squeeze on business. You”

really do. Let me ask about the broader cost of living for a second, probably the most impactful cost to people's lived experiences to cost of housing. Yeah. Double click into that for a second,

for the 40 million residents of California, what is going on? Why are rent so high? Why are homes

so expensive? And what can actually be done to make the cost of living and rent cheaper? So the thing, this particular issue, I think, almost captures better than anything else, the underlying structural reasons. Why everything is so difficult in California. And so expensive. Because you've got these three structural forces that I think underpin the problem and show why a Democrat can't fix it. And the three things are union power,

litigation and climate dogma. And they all come together in the housing story. The first part of the story is that we're just not building enough homes for the number of jobs that we're creating and the size of our population. It's a classic supply and demand situation. Now within that, there are certain wrinkles you could point out because of rent control, which has got completely out of control. There are a lot of empty properties in California that could be used to house people.

But they're not because landlords don't want to do it because the rights have gone as long so far in favour of tenants. But I don't think that's the major driver. The major driver is the fact that we just haven't built enough housing of different clients. And if you go through

the reasons for that and why it's so expensive, the brings into play these three factors. First of all,

it just costs more to build anything in California. The same exact floor plan, house, apartment building, industrial building. Whatever it is, cost just two or three times more to build in California than in neighboring states. The first reason is the building codes, the actual requirements for construction, which is way more owner is driven by climate dogma that actually

install a here we are. Because like Nevada's heart and drought ridden and Arizona has issues.

So, what is it that we say that those states don't say? So, when you build apartments or when

“you when you build parking, you have to put in EV charging. And the scale of what's required for the”

EV charging just makes it more expensive. If you have to, you know, likely to do a parking structure, if to reinforce the floors, the base have to be wider. Just their ads that you can have, you didn't, you have fewer base per structure. There's specific costs associated with that. Solar panels. We talked about that earlier in terms of low-income apartments that the taxes are paying for, developers have to pay for that as well. Insulation, energy efficiency, all these

things are good. And I think that's pretty much the story of California, which is things that

start with good intentions actually end up being taken to an extreme where it just makes it too expensive to build that a rate that people can afford to buy the properties. And the other two are really that sequo or anybody can sue on the back of the private right of action on the secret. And but let's unpack that because that brings together three things, climate, litigation and unions, because sequo the California environmental quality act itself is is a nightmare in terms of the amount of regulation

“you have to comply with. The private right of action means anyone can sue. 70% of sequo law suits”

are used to block housing. Most of those law suits are filed by unions. They're used as leverage to negotiate what they call project labor agreements where you have an agreement for the site and usually they have one or both one or two of these components. Both of which sound great, skilled and trained work force, which means union only says a closed shop and prevailing wage, again sounds very good, but it's two or three times market rate wages. So both of those things inflate the cost. Often

I've spoken to many developers. There aren't enough union workers in the area to actually do the jobs that they have to sometimes fly them in from other states to do the job and they've got the cost to travel and accommodation. It's just this way to teach them off. There's no equivalent to sequo and Texas where I now reside after 20 years in California. The other thing is the fees. It's 30,000 per door in fees. Yeah, to build a door in California. It's under a thousand in Texas.

And in California has three times the new units per capita, then California. So every year we produce three times as many new homes per capita. Just a simple question, no guys, put this into chat, GPT or whatever. California's mandate with sequo is to protect the air, protect the water, protect the land by some measures. Texas doesn't have it. Is it the case that Texas's air is worse, the water is worse, and the land is worse? No, definitely no. So is it roughly the same

meaning the particular count, the pollen count, is the air quality the same? Because if it is, then what is sequo doing other than just slowing down and retarding the progress of housing? Why

“hasn't that studied? Because I think, again, all of this guys comes back to when the data is presented”

in a way that's factual, there's very little room for people on both sides to argue it because they're all relatively smart. It's when it's presented either in a partisan way or by somebody who wreaks of partisanship that I think people attack the messenger versus the message. So I'm just trying to understand, why hasn't the California government confronted this? It has the highest friends in America. It has the highest poverty rate in America. And it also has the highest

regulation that has the lowest and the slowest unit housing growth. Steve, I guess what I'm asking you is, how does that not get to the legislature? I'll tell you more. Okay, I'll tell you,

it's I'm afraid the answer is the corruption within the system and the interest groups

that have taken over the system. I'll tell you story, which is my first, I know a lot about housing policy, because the first area of policy I studied when I decided that I wanted to get into the whole world of policy in politics in California. I actually tried to get a ballot initiative, qualified for the ballot that would have two elements to it. One is what Jason just mentioned, haping impact fees, which are now up to about 20% of the cost of housing. I wanted to do a statewide

cap of 3% of construction costs. And the second component was eliminating the private right of action on the secret. I didn't succeed in getting it on the ballot didn't raise enough money in time. So then I tried to pursue it through the legislature. Well, let's see if we can make some

started to engage with Sacramento. There's one meeting I had with the legislator who was

“described him as good on housing as a person you need to talk to. And we had a great meeting.”

They said, this would be transformational. I said, great, let's work on it together by partners and your Democrat. I'm Republican. That'd be great people like that. Oh, I couldn't support you publicly. Why not? Well, the unions would hate it. Why? Because if you take away the private right of action, you take away the unions leverage. And I said, yeah, but you just told me it would be transformational. We were sitting in an office. You could see the state capital down below. They just wave

their arm around like this and said, yeah, the unions run this place. And that's the real reason.

If you look at, for example, we used some touted these two bills last year, AB 130, AB 131,

that were going to solve the housing crisis. He said, this is the moment where we are embracing abundance and all the rest of it. Big secret exemptions for certain types of housing. But if you look at the fine print, tucked away in it, you only get the exemptions if you have these project labor agreements and union closed shop and prevailing wage. So you're just writing back in exactly the things that sequers causing the cost increases from. So because the union, let's follow

it all the way through, if you look at Gavin Newsom's political donations over the 16 years he's been running statewide, just as a proxy for Democrat politicians by category. The number one category,

government unions, number two trial lawyers, number three non-government unions. So these are the

“that's why nothing changes because the interest that benefit from this system are funding the”

politicians that make the decisions. Yeah, I'm talking about to your other question of like, is the environment better since 1970 when this regulation came into pass? Calvines still has the worst air quality in the country, largely because of the addiction to cars and traffic and then Texas, as a comparison, just has industrial waste problems because we don't want chemicals here or chemical processing done here. So we have a car loving culture in California to your point Jason is part of our

cultural fabric driving down Highway 1. It's just a very iconic thing that's embedded in the state. Steve, I have two questions. What has all of the incremental regulations done with respect to climate quality, whether it's EV mandates or the ice engine requirements, and then separately, just as a more general way to explain it, why is gas in California, $7, $8 a gallon, and why is it $3 everywhere else? Why is ours more than two acts that it costs everywhere else, including other

states that are also quite expensive to live in? Well, also that we have the highest gas in the country, including Hawaii in the middle of the Pacific Ocean, even though we have abundant oil reserves here. So we have way higher gas prices than states that don't have oil reserves. We actually have very significant oil reserves in California. The fundamental reason that gas prices are so high is because, again, in the name of climate, but without actually actually, in this case, it's

counterproductive to climate. Instead of using the production that we have here in California, I've been to the oil fields and current county mainly near Baker's field. We are now importing nearly 80% of the oil that we use. Over the period of the since, really, there's all starting 2006 with the passage of the global warming solutions. That was the sort of foundational climate legislation in California. Over that period, our use of fossil fuels has declined by not that

much and the proportion of our energy that's coming from fossil fuels is about 80% still. The rest of the country is about 81% says barely any different. But the difference is, we use to produce most of what we use in state. Now, we are importing nearly 80%. And that has driven up

“the cause. You have to strip it for half way around the world. Our number one provider is Iraq right”

now. There's the number one source of oil. Sorry, sorry, sorry, sorry, sorry. The state of California itself, we are not wholly dependent on Iraqi oil to sustain our economy. It's the number one provider. Yes. So if you look at the sources of oil, number one Iraq, number two, I think it's Ecuador, and Brazil, but the broader point on that is, because we said, let's just go back a few steps. We had a really strong energy industry and infrastructure in California, where we produced most of the

oil and gas that we use. And we had refineries about about 40 of them around the state mostly in the bay area down the LA that refined and turned into products that we use gasoline and so on. Now we're

could be refining by shipping it in instead, because there are no pipelines of oil pipelines

“into California. Whatever we don't, if we don't use our own, we have to bring it in by tanker.”

Because of this, and because of the fact that the refineries were built to refine California crude, which is known as heavy crude. They're different types around the world. You've got to have a good match. Iraq provides Iraqi oil, is a good match. The other place whose oil is a good match for our refineries is South America. And so as a result of Democrat climate policy, we are now expanding oil drilling in the Amazon rainforest in order to provide the right kind of oil for California's

refineries. I mean, it's just so utterly insane an incoherent. And of course, in the process we're

spewing out carbon emissions, because the tankers run on what's called bunker fuel, which is the

most polluting form of transportation. There is, and just to make the whole insane scheme work, carve the California Air Resources Board, which is obsessed with having all other businesses. It's a count for their carbon emissions right down the supply chain. Miraculously, the carbon emissions for the oil imports are only counted from when they're 12 miles off the coast of California. It's just so crazy. Yeah, the change, the finish line there. The taxes are like a dollar

a gallon and then there's this carabstandard. It's about 60, yeah, it's just like it's more like 61.

“I thought 65 I can't remember exactly, it's just going up again. Yeah, it's just most of the”

most of the two dollar premium as it were for California is regulatory, not taxis. And most of them, oil, that's been pulled out of the ground in California. We got the easy stuff out. What's left is generally dirtier or thicker? That's not right. I've had lots of conversation with the industry

on this. And the problem is that you've got fields that could be producing, but an actually

is a good example of what you can do as governor without the legislature, because the way that they've been shutting down production is not legislatively. It's to an agency of the state government called Calget and the California Department of Geologic and Energy Management. And it's simply a question of refusing to issue permits for the various stages of production, including maintaining existing wells or expanding. There's a process called site tracking where you can take a

well that's doing five barrels a day and increase it to 100 or whatever. And then drilling new wells and existing fields. And they're denying permits for all of that. Actually, you can pretty much turn that around overnight by appointing people who have pro energy, who will issue permits.

“Because I think there's a simple common sense rule here, which is, as long as we're using oil”

and gas in California, let's use our oil and gas rather than importing it. But my conversation with the industries that I said, look, what could what could we do if we had a kind of green light from a governor and a regulatory framework that just says, let's do what we can. Let's produce what we can. The estimate that I've got from them is that we can double production every two years in California. If we're already one of the big gas parting states

with the worst air or previously my state, you know, then you're going to get into the circular conversation with the public of, do we want the air quality to decrease? And most people would say the EB credits were actually a good thing because we had 20 years of smog going down. Even though we're still worse, it's gotten a lot better. So that's long as that's to do with poverty. But there's a real misunderstanding, so the completely agree on air quality. And one of the major

advances that has been made is that it's picked picking the LA basin is on smog. Obviously I wasn't here then, but people say, you know, it's really bad and now it's not as clean skies. And you can see Mount Bouldy or whatever, you know, it's like a really different world. But that's nothing to do with carbon emissions. And so, and that's to do with actually the main driver of the air quality improvements in California actually are technology. And if you look at EVs, I mean, EV penetration

even with all the subsidies and so on, it's incredibly low in California. So you can't can't put it's about four or five percent something like that. Tiny. So actually the improvements in air quality, dramatic improvements that you saw in LA, would nothing to do with EVs. Steve, I want to switch topics to education. This is a thing that we on the plot talk about a lot. We're all the byproduct of a pretty fantastic education system, affordable education,

frankly, at every level. We had options to pay for. Yeah. We all had access to things like AP to really distinguish ourselves, even Jason. Mr. What's happening in the California

compensation to outcomes? Because I think a lot of us would want to pay teachers triple. But we want to tie it to something that says, wow, the test scores are going up. Our kids can read, our kids can write, our kids can compete on the global stage. And it just feels like we are moving backwards. We really are and it's just, I mean, the numbers are horrific. I mean, you've got

first of all, we'd spend nearly the most of any state per student right now in this year. It's

about 27,000, just over 27,000 per student pay year in California. If you take the average out the

“money and we get some of the worst results in the country, but I think the number for, you know,”

40 is 47% that meet basic standards in English and reading. So less than half meet basic standards. For math, it's 35%. Then two thirds do not meet the standards. It's just an insane level of failure considering we spend nearly the most. And I think again, you've got to look at this in a practical way. There's a long-term structural reform that I think we need. Because the driver of this is really the grip on the government school monopoly of the teacher units who

increasingly have been driven by ideological factors. You saw that, for example, in the pandemic, when you still be, you know, the longest and most destructive school closures in the country. And I was always struck by LA, the teacher union in LA, when they put out their demands for reopening schools. It was just a list of politics, a wealth tax, Medicare for all, something about Palestine. You know, it's just they're completely big hum, an organized political interest group

that's about their members and broader political goals rather than anything to do with

“the interest of students and kids in school. So I think that the fact that you got this monopoly”

is of the public tool system controlled by the units, they of course in turn control the politicians. As I mentioned earlier, the number one donor to democrat politicians of these government unions, including the teacher unions. And so you've got to break that grip. So I think that long-term

the answer is to move in the direction of school choice, which I've always been a strong advocate

of. You're seeing that school choice revolution across the country, now many states moving very rapidly in the direction with really good results. It's not a panacea, but I think that that is the long-term structural change you need, but that takes a long time and it's going to be very, very hard to get that moving in California given the fact that the teacher unions basically control the legislature through the democrat politicians. They put that. So there are some practical

things that we've got to do immediately to improve these basic standards. And here we got to look at what works elsewhere. And you see a lot of the tension now on Mississippi rightly so because for one third of this spend per student than California, there is also spectacularly better. And it's really helped in the last 10 years. And there's some simple practical things that they do. Number one is how you teach kids to read. There's a technique of reading instruction.

I mean, this was a debate. I remember having back in the day in England in the 90s and it's pretty much settled then, which is there's a technique called phonics. It's a way to teach kids to read. And it's totally clearly established as the most effective. It's barely used in California schools. At all, it's like in a very small proportion of schools, with public schools. So that's something that the governor can drive forward through the state board of education where you appoint all the

members. Secondly, in Mississippi, they introduce something very common sense, which is as everyone

in education says, up to about third grade, you're learning to read. And then from fourth grade,

you're reading to learn. And if you can't read, you can't learn. And so there's widespread consensus that reading by third grade by the end of third grade is incredibly important benchmark. In Mississippi, if you don't read by, you don't pass the basic reading test by end of third grade, they give you a bit of help over the summer. And if you still don't make it, you repeat the year. They don't let you go forward. That single change has transformed their results. And then

your point about accountability also happens there where they give, and this is something else that we could implement here, which is taking the publicly available test scores and data, but really assigning it in a very visible way to individual teachers and individual schools. And that's one of the proposals I've got in my campaign, which is a grade for every school, and a grade for every teacher. So we can reward the good ones and remove the bad ones.

Two more topics that Californians are very passionate about and have a lot of opinions about.

“I think one is pretty challenging. The other one seems pretty easy. Another states have handled it,”

where it's easier, crime and then homelessness. Crime, obviously, as a society, we've seen violent

still 30 percent more violent than the rest of the country. So we definitely have a violence

problem specific to California. And if you live in the major cities, South Francisco Los Angeles, they let people out for petty crimes under $850. They're seems, and we see going to a drugstore, everything's locked up. So there is a feeling, and a lot of debates over the numbers, that there's a lot more property crimes. Some people claim people don't report it anymore.

“That was my lived experience in California. What is your take on crime and then we'll go to homelessness?”

Yeah, I mean, it's just a classic thing in California, where they seem to be brilliant at passing laws, right? Every year, more and more laws, more more bloats and bureaucracy, more on nanny's state nonsense. Last session, for example, they passed, there's one session, 1118 bills. That's the number of bills that the legislature passed. We did a thing outside the state capital. I mean, I'm not very tall. We printed them all out as like double my height. I mean,

just ridiculous. The point I'm making is really good at passing laws, but not very good at enforcing them. They're just something missing in terms of the apt of the willingness to just enforce the law. That's going to be one of the main points I make in terms of homelessness. But when you get to crime, there's just this attitude. I mean, there's something off about how the left has seen this issue. And it just when you think it's, you know, the worst successes of

defund the police and all that have receded. You've now got them popping up. What is it? This new thing, micro-luting, right? Oh, micro-luting is then York Times and that podcast is going on about how it's fine, because it's just social justice. And we're allowed to kind of

basically steal things because it's okay. It's just unbelievable, it's a version of basic

values and morality. It's just unbelievable. On crime, it's very decentralized in terms, I mean,

“there's some state things that need to be driven. Remember that the law that you're talking about,”

that legalized theft up to $950 a day, that has that that partner's been overturned. That was Prop 47, which was a few years ago has been overturned by Prop 36, which was overwhelmingly passed in 2024 by about 70%. But of course, it's not being properly implemented. Gavin Newsom was against it. And so were most Democrats in the state. The people passed it anyway. But now there's real resistance to enforcing it, which is ridiculous. In terms of the overall picture, though,

it is very localized. You know, you've got local police forces and cherished the part of the so on. So my focus has been, well, what can you do as governor? And then one of the biggest drivers, I think this, this calls the problem, is it's really started with Gerry Brown before Gavin

Newsom's accelerated it, which is the prison closure program. They've, they've, they've basically

also, this is classic California, they've reduced the number of prison places by half,

“guess what happened to the budget. It doubled. Not quite, not quite that bad, but like,”

it's a classic. They doubled, they cut the numbers in half, doubled the budget. But the point the serious point is that you've had tens of thousands of really dangerous violent criminals. Either released directly into the community or more, you know, destructively for this, for the system, transferred to county trails, which are now completely overcrowded. And therefore, at the local level, the whole system is aware that you've had all these transfers from

state prison. The system is full. And so there's no capacity. And that really undermines the kind of accountability that judges and prosecutors would want to seek at the local level, because they know the jails of fall. And so that in turns undermines law enforcement, because they say, what's the point? I mean, I hear this term all the time from law enforcement around the state. I'm driving this day the whole time. They talk about action release as the basic

operating rule for their kinds of crimes you're talking about. You catch them. They just release. Nothing happens. And so that undermines law enforcement, why bother? If we're just going to bring these people in and nothing's going to happen to them? And that in turn undermines public confidence, because everyone sees that. And then they, as you just said, don't bother reporting it. So a simple thing we can do that is completely within the governance control is stop and reverse the

prison closure program, which is what I've committed to doing, is it to increase prison capacity in California. That means that you can relieve the pressure on county jails, but also that means that you can use the prisons for what they should be doing, not just bringing accountability. You commit a crime should be punished, but also rehabilitation. We've got one, we're not, we're not the worst, but one of the worst, recidivism rates in the whole country. And if we did one of the best,

one of the best takes is Virginia, they're less than half what we have. That would massively

I mean, the huge proportion of prisoners in these jails, they can't read properly, many have

dyslexia. You know, you've got to have a really serious view on it. And they just don't,

“they have an ideological view. I think that is the problem with so many of these issues.”

It's ideology. In this case, it's decalseration, can't have people in prison, prison is racist, criminal, justice, or this ideology instead of just practical things to keep people safe. News some shutdown for a five of the California state prisons are absolutely correct. According to my notes, and then it peaked in 2006, California had 165,000 people in state prisons now, 93,000 people. So it is definitely a trend. And I think a lot of folks who are living here, or who are

living in California were used to live are not in favor of that. Looking at homelessness, is it intractable in California? No. One thing I'll just point out, if people are interested in digging in further to some of the things I've been saying, there's a couple of places you can go for real depth on this, which is the last three years I've been traveling the state and kind of learning about this stuff and developing solutions. And I had a policy organization

“for that called golden together, golden together dot com and you can find policy reports on”

many of these areas we've discussed and more, including one on homelessness, called ending homelessness. And actually my real partner in developing that was so called Michelle Steeb, who's done a lot of work on this year. She actually run homeless shelters and really at the kind of street level of this for many, many years. Also, someone called Tom Wolf, who's giving me a lot of great advice, he's in San Francisco, recovering addict, recovered addict who's just fantastic.

It's a vocal on Twitter and yes, so very common sense approach. Yeah, exactly. Okay, so it's very simply, I'll try to sort of capture it simply, it's three points. Number one, it actually already

is illegal to live on and the homeless incomes already are illegal. They've always been illegal.

It's another example of where we just got to enforce the law. For years, local politicians of California hit behind a court ruling that is called the Boise ruling from many years ago, which stated it's the Ninth Circuit ruling applies to the Western states, which is that the statement there was, you can't remove people from the street unless you have sufficient shelter available locally. And they use this to say we can't remove people because we don't

have enough shelter. It didn't define what shelter was. They defined it as these permanent supportive housing units costing $900,000 a door, but it could have been a camp with costs. You know, there's no reason. But even that, excuse has been lifted because there's a Supreme Court case called Grant's Pass versus Oregon in 2024 overturned that. So there's no excuse. These people running local governments where they have the power and the legal authority

to remove every single homeless in California. And they should. And my argument is, I'll give that once I'm elected, I'll give them a certain amount of time. And if they haven't done it, then I'll use state law enforcement resources to take people off the streets. And then you get to public two and three of the plan, which is, what do you, you've got to give people help in a compassionate way, help them get their lives back on track. So number 80% of people at homeless

have drug or alcohol problems, addiction or mental health problems. You've got to deal with that.

So the second part is drug and alcohol recovery. You've got to get people into recovery.

That used to be the rule in California, rehab or jail. And we've got to get back to that. It can't be an option. We've got plenty of service providers who can do it. You've got to require it. I mean, last year, even the, going back to our point about the legislature, even the Democrat legislature passed a bill called the sober housing act, which would have taken a certain proportion of homeless suspending and allocated it to shelter where you had

a requirement was sobriety. Newsom vetoed that bill. It's unbelievable. So we got to have a hundred percent sober requirement for any kind of state services on homelessness. The third part is mental

“health, where honestly going back to the jail's conversation, you talked to sheriffs around the”

state, the, the, the number varies, but they say 50, I've heard as high 70% of the people in their jail's have severe mental health problems. That's where we are actually treating people with mental health problems either there on the street or there in jail is totally barbaric. And one of the reasons is that when you're talking about the homeless population, obviously low income people, so it's very much in trying to talk about mental health care with Medicaid, with the federal

system. And there's a rule in Medicaid that was set up right at the beginning when it was founded in the mid 60s, called the IMD rule, institutions of mental disease. And this was a time when they didn't want large, this mental asylum and whatever, the idea was you have small facilities in the community. So the rule is there is no Medicaid reimbursement to the states for any mental health

thing incredibly un-economic and inefficient, imagine of hospitals could only be 16 beds, how inefficient

“that would be. The first Trump administration created a waiver, the IMD waiver, the state's”

good apply for, so you could get, you know, get around the rule. The California, a lot of other states have taken that up, California hasn't, there's plenty of money in the system like we've been

saying, the budgets of there, they've just been diverted into the wrong places, so the third part

of the plan is to take the money that's currently going into the homeless industrial court, like these ridiculous apartment units for people who should be either getting mental health care or recovery treatment, take that money and put it into modern large-scale mental health facilities, and then we can, and when you're here for a good work, that's a great place for you to put a exact magnifying glass, because that's where there's massive amounts of growth.

100% cannot believe how much we spend in this, we spend in California on homeless, and if you pay for something, you will get more of it, and they're getting a lot more of it. Steve, as we wrap up, give us the quarterback view of your path to victory. Walk us through the sequence of events, the key moments leading up to the primary vote, and then from primary to election day, what has to happen for you to get to Sacramento? So we have the top two system for those who

are in another crazy California thing where you end up with two candidates going through to the general election, regardless of party, the idea of this was to have more moderate politics, every since it was introduced, the state's called further a further to the left, and so you've got various scenarios that are possible, right now I'm leading in all of the polls.

“On the Republican side, there's one other candidate. I think with the president,”

with President Trump's endorsement of my campaign, I think we can expect. I'm pretty confident that we can make it into the top two. It's not certain. We've got to fight very hard over the next month or so. The ballots go out next week, early May, but I think that we're going to have a top two with myself and one other Democrat, and right now it looks as if it's going to be one of Tom Stire, Katie Porter, or have a basera. And all of those three represent either no change

from what we have now, or a move even further to the left in the wrong direction. So I think broadly the argument is going to be very straightforward, which is a happy with the way things are going in California. You do want more of it, and if you do vote Democrat, or do you think we need to change? So it's a classic change versus more of the same election. Getting into the numbers, I know a lot of people look at California and say it's impossible for a Republican to win and Jason was pointing

out. We've had Republicans in the past, but that was a long time ago, and you could say special circumstances, because Arnold Schwarzenegger was elected in a recall election, and so on. And he was a celebrity. He was high enough. He was a lot of lives in Los Angeles, half the state.

Exactly, all of those things are true. But, and so I've always said from the beginning of this,

that it's not going to be easy to win. It's going to be very difficult because of the structural factors in California, but it's not impossible. And given the seriousness of our predicament,

“and how much I think the whole country depends on a successful growing, thriving,”

leading California, then we should go for it, because getting things back in a common sense direction is just a really important thing. I was saying, California means to America, what America means to the world, and so this matters. If you look at the numbers, on the, on the, some people look at the voter registration numbers, and they say, Democrats outnumber Republicans two to one. And that is true. But when you look at actual voting,

the gap is a little bit closer. Over the last 20 years where you haven't heard Republicans elected, the, the pretty much did average Republican vote has been just over 40%. So they've been like a 60, 40 split. Obviously, that's not close, but the gap is perhaps not as wide as some people might think. But then you look at a couple of factors that I really think are different this year.

First of all, there's a dissatisfaction with the way things are going. There wasn't there before.

If you look at that basic number, is the state on the right track roll track. In the, even four years ago, in the last government's race, the roll track number was going to mid to high 40s. Now it's mid to high 50s. So there's a majority for change in California. Just put it that way, which is a good environment to be going into as a candidate representing change. The second point is if you look at the actual votes you're going to need to win. This is a midterm election,

2026. If you try and get some kind of sense of how many votes will be cast in the midterm election this

Total votes as an estimate. So to win, you're going to need just over half of that,

“call it 5.9 million. Now, when people say there aren't enough Republicans in California to win,”

and that in 2024 in the presidential race, President Trump in California, without even campaigning

here, or spending money on ours or anything, wasn't a targeted state, got 6.1 million votes.

In other words, there's more than enough people of just voted Republican for President Trump. Now, of course, you're not going to get 100% of the presidential year turnout in the midterm election, but the reason I make that point is that the votes are there, actually, even with just Republicans. Now, I don't think we're going to get their just with Republican votes, but that's the starting point.

It's a strong campaign to turn out Republican votes and a big driver for that. They see it,

again, it's a unique feature. This year is the fact that in November, we're going to have vote to ID on the ballot. That just qualified for the ballot. And Republicans, particularly, are enthusiastic about vote ideas. I'm going to help us get a big turnout. And then in terms of

“the coalition for victory, I think that you've got a real opportunity to put together the kind of”

multi-racial working-class coalition that President Trump put together, because it's put as going right back to where we started, it's working-class people who are really, really struggling and being hammered the most by these policies. They get to vote directly for no taxes, no state in contexts. Exactly, because that's my textbook. I just put this out there just the other day, which is no and no tax on tips. That's the other part. I mean, which has been implemented

at the federal level, but California won't do it at the state level. Just my whole plan is geared to a $3 gas, I call it call it call affordable. $3 gas cut your electric bills in half,

your first 100 grand tax free, a home you can afford to buy. Really simple, practical,

common sense things that particularly help the people who've been hurt the most over the last few years.

“And I think that's how we pull this off. Steve, on behalf of our land, I just want to say thank you”

for being so incredibly candid and open with us. We're wishing you the best of luck. Thank you so much. And just for my seat. If you want to go back, no, I mean, if you want to just, I left for a reason. And part of it was the dysfunction of the state. And if you want things to continue, I think, you know, having an unbalanced government that's all in one party is a way to do that. You gotta try to find some balance here. And I think why not give it a shot. If you're in California,

you have nothing to lose the state is in a massively dysfunctional situation. So I wish you a great luck, Steve. Helton. Thank you guys. Great to be with you. Cheers now.