All-In

How Matt Mahan Thinks He Can Save California

with Matt Mahan
23 Mar 2026 12 min read 1h 35m
TL;DR

California's crisis isn't a money problem—it's an incentives problem. After increasing state spending 75% ($150 billion more) over six years, outcomes on housing, homelessness, crime, and education have stalled or worsened. Mahan argues the state has been captured by organized interests (public sector unions, trial lawyers, trade associations) and needs structural accountability, outcome-based budgeting, and fewer regulations rather than more spending.

Key Moments
Matt Mahan
“We have increased spending in state government by 75%. To put that in perspective, that's a $150 billion more this year than 6 years ago. And as far as I can tell, none of the outcomes have gotten better. Never mind 75% better, many of them are flat or down over the same time period.”
Explaining why California's fiscal trajectory is unsustainable despite massive budgets
▶ 2:04
Matt Mahan
“We don't have a money problem in Sacramento, we have an incentives problem. We have a structure that allows us to keep shoveling more money into things that aren't working.”
Core thesis for why government spending reforms must precede budget increases
▶ 2:29
Matt Mahan
“It's contractors, it's lawyers. Some of it has gone into actually building the project, but belatedly, what happens in California, and the reason we can't build we can't do big things anymore, is that we've got endless process, years of environmental review, the most litigious environment imaginable.”
Describing how the $14 billion high-speed rail budget was consumed by process rather than infrastructure
▶ 2:57
Matt Mahan
“We have a tendency, particularly in the Democratic Party, to want to be empathetic and tell everyone that we're working on everything. We try to be everything to everyone all at once, rather than very strategically saying some things matter more than others.”
Critiquing the political incentive to appear responsive rather than focus on measurable priorities
▶ 8:49
Matt Mahan
“We've gone from about 100,000 units a year to about 80,000 a year. You go farther back, it was 150,000 a year we were doing. For every two jobs an economy creates, you need at least one home. Over the last 20 years, this incredible economy here has created about eight jobs for every one new home we've built.”
Quantifying the housing supply crisis in Silicon Valley and proposing a jobs-to-housing ratio framework
▶ 25:15
About Matt Mahan
›
Matt Mahan is the Mayor of San Jose and a gubernatorial candidate for California. He grew up in Watsonville in a working-class family, worked his way through college, and spent a decade building civic tech tools including an early Facebook application called Causes and a platform called Brigade. As San Jose's mayor, he has focused on outcomes-based governance, reducing crime to make it the safest big city in the country and cutting unsheltered homelessness by roughly a third.
Takeaways
1
Budget growth without accountability creates waste California increased spending 75% in six years but saw flat or declining outcomes. The problem isn't insufficient funds—it's lack of performance metrics and consequences. Mahan advocates public dashboards, outcome-based budgeting, and auditing underperforming programs to cut waste before raising revenue.
2
Regulation, litigation, and process are the real cost drivers Housing, infrastructure, and public services are expensive not because of labor or materials but because of environmental reviews, construction defect lawsuits, permitting fees, and bureaucratic layers that stretch timelines and multiply costs. Trial lawyers and regulatory complexity are bigger obstacles than tax rates.
3
Organized interests have captured state incentives Public sector unions, trial lawyers, and trade associations shape legislation to defend the status quo rather than serve constituents. Elected officials lack courage to challenge these interests publicly, even when their own colleagues admit privately that the system is broken. Outcome-based accountability could realign incentives toward results rather than revenue.