How Matt Mahan Thinks He Can Save California

What It Covers

San Jose Mayor Matt Mahan, running for California governor, argues the state's core dysfunction stems from misaligned incentives rather than insufficient revenue. California increased spending 75% over six years to $349 billion while outcomes in housing, homelessness, education, and public safety remained flat or worsened, pointing to structural accountability failures rather than funding gaps.

Key Questions Answered

• •Government Accountability via Public Dashboards: Mahan implemented public-facing performance dashboards in San Jose with explicit baseline metrics and year-over-year targets — 10% annual homelessness reduction, faster permit timelines, crime reduction goals. This approach produced measurable results: San Jose became the safest large city in California, reduced unsheltered homelessness by one-third, and accelerated housing permits without raising taxes. Replicating this outcome-first framework statewide requires governors to set public goals they can be held accountable for at election time.
• •Homelessness Cost Efficiency: San Jose shifted from spending $1 million per door building permanent supportive housing units to deploying modular sleeping cabins on public land at $85,000 per unit all-in. This pivot added over 2,000 shelter beds in three years. Two-thirds of unhoused individuals accepted indoor placement when offered private rooms with locking doors. The remaining third, deep in methamphetamine or fentanyl addiction, require involuntary treatment intervention rather than voluntary outreach programs.
• •Housing Supply as Root Cause: California builds roughly 80,000 housing units annually, down from 150,000 historically, while the Bay Area created eight jobs per new home over twenty years. Construction defect liability allows trial lawyers to file suits in year nine of condo projects, effectively eliminating that entry-level ownership category. Removing CEQA litigation exposure, reducing one-time city fees that add 20% to project costs, and adopting modular construction methods could reduce per-square-foot building costs by at least one-third.
• •Pension Reform Roadmap: San Jose's unfunded pension liabilities consume 19 cents of every general fund dollar today. The city negotiated a two-tier system: existing employees retain legacy benefits paid down over a 20-year glide path ending in the early 2040s, while new employees enter a defined-contribution-style plan with shared downside risk — cost overruns split 50/50 between taxpayers and employees. This structure avoids legal challenges from the California Supreme Court's prohibition on rescinding promised benefits.
• •Energy Regulation Unintended Consequences: California regulated most in-state oil refineries out of existence over the past decade, yet still imports equivalent petroleum volumes from thousands of miles away. The result: higher carbon footprint from transport, loss of high-paying refinery jobs, reduced local tax base, and California gas prices at $5.50 versus the national average of $3.50. Mahan proposes temporarily suspending California's 70-cent-per-gallon gas tax and funding road maintenance from the general fund, which grew 75% over six years.
• •Wealth Tax vs. Loophole Closure: A state-level billionaire wealth tax accelerates capital flight — over $1 trillion has already left California — and ultimately shifts the burden to middle-class residents who remain. More effective revenue measures include taxing loans taken against unrealized appreciated assets and eliminating the stepped-up cost basis at death, which currently allows heirs to inherit hundreds of billions in appreciated stock without ever paying capital gains. These targeted loophole closures capture revenue without triggering mobility of high-net-worth individuals.