Steve Hilton Criticizes Gavin Newsom for California’s Economic Challenges

Steve Hilton, the front-running Republican contender for the California governor’s seat, has leveled a strong critique against Governor Gavin Newsom’s administration. Hilton claims that an overwhelming surge in regulatory red tape and cumbersome laws has hindered California’s potential to become the world’s third-largest economy.

“To surpass Germany and secure our spot as the third largest economy globally, we need to dismantle the bloated government bureaucracy and its plethora of regulations,” Hilton stated to The California Post on Wednesday, speaking from outside the Capitol.

Hilton argues that California’s extensive regulatory framework has ballooned into an unelected governing entity that inflates costs for housing, utilities, and businesses, thereby diminishing the state’s competitiveness against more rapidly expanding states.

According to a new report from Hilton’s initiative, CAL DOGE, California’s government code now encompasses over 420,000 regulatory restrictions. In comparison, Texas has 274,469, Florida has 170,321, and Tennessee has 121,620 such restrictions.

The report also highlights a cost benchmark unique to California, which estimated the state’s total annual regulatory burden at $493 billion in 2007 dollars. When adjusted for inflation, this figure rises to approximately $745 billion annually in current terms, equating to around $55,000 per household.

Hilton described the situation as an “absolute nightmare of bureaucracy that is completely stifling everyone and everything in California.”

“We have had no pushback from Gavin Newsom — it’s just sprawl and sprawl and sprawl of red tape and nonsense.”

The governor’s office did not immediately respond to a request for comment.

CAL DOGE’s report ties California’s regulatory burdens to the state’s housing crisis, arguing that the state has failed to build enough homes while faster-growing states have added housing at far higher rates.

Between 2018 and 2024, California’s housing stock grew 4.7%, while Texas and Floirida has 13.7% and 11.3% growth, respectively, according to the report. Tennessee also substantially outperformed California while operating with far fewer regulatory restrictions.

California’s population fell 0.2% during the same period, while Texas grew 9.4%, Florida grew 9.5%, and Tennessee grew 7%, per the report. Even as Texas and Florida absorbed millions of new residents, they dramatically outpaced California in homebuilding, the report found.

California added 16.9 housing units per 1,000 residents, compared with 53.3 in Texas, 50.9 in Florida, and 36.7 in Tennessee.

If California had matched Texas’ housing stock growth between 2018 and 2024, the state would have added about 1.3 million additional homes, according to the report. Matching Tennessee’s pace would have produced more than 500,000 additional homes.

“Californians experience the cost of this administrative state through that $55,000 per year burden per household — higher housing costs, elevated utility bills, infrastructure delays, consulting dependency, and reduced affordability,” said Jenny Rae Le Roux, the director of CAL DOGE and a Republican congressional candidate in Orange County.

“It is impossible for any leader to address all of the issues that Californians care about without addressing the underlying regulatory vote.”

The report singles out the California Environmental Quality Act, or CEQA, as a major procedural system affecting housing, infrastructure, transportation, and energy projects.

Authors of the report say the projects often face environmental impact reports, cumulative impact analysis, mitigation requirements, redesign costs, and litigation exposure.

Hilton pointed to the Capitol during his press conference and accused the Newsom administration and state lawmakers of running wild with red tape.

“We’re never going to achieve our goals,” he said, without cutting it back.”