Steve Hilton, the leading Republican in the race for governor of California, accused the administration of Gov. Gavin Newsom for allowing an explosion of regulatory and burdensome regulations that have prevented the Golden State from becoming the third largest economy in the world.
“What we have to do to defeat the Germans and become the third largest economy in the world is to put the nanny state bureaucracy and all its laws in the woodshed,” Hilton told the California Post Wednesday outside the Capitol.
California’s burgeoning regulatory system, Hilton says, has grown into an unelected arm of government that raises housing costs, utility bills, and business costs while making the state less competitive than fast-growing states.
A new report by Hilton’s CAL DOGE program notes that California’s state code now contains more than 420,000 regulatory restrictions compared to 274,469 in Texas, 170,321 in Florida, and 121,620 in Tennessee.
A California-specific cost benchmark estimated the total annual regulatory burden at $493 billion in 2007 dollars. Adjusted for inflation, the CAL DOGE report says that amount equates to $745 billion a year in current dollars, or about $55,000 per household.
Hilton called the situation “an administrative nightmare that is strangling anyone and everything in California.”
“We’ve had no pushback from Gavin Newsom – it’s a sham and a stream of red tape and nonsense.”
The minister’s office did not immediately respond to a request for comment.
The CAL DOGE report links California’s regulatory burdens to the state’s housing crisis, arguing that the state has failed to build enough housing while fast-growing counties have added housing at much higher rates.
Between 2018 and 2024, California’s housing stock grew by 4.7%, while Texas and Florida grew by 13.7% and 11.3%, respectively, according to the report. Tennessee also outperformed California while operating with far fewer regulatory restrictions.
California’s population fell 0.2% over the same period, while Texas grew 9.4%, Florida grew 9.5%, and Tennessee grew 7%, according to the report. As Texas and Florida drew millions of new residents, they dramatically outpaced California in housing construction, the report found.
California added 16.9 new homes per 1,000 residents, compared to 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 1.3 million more homes, according to the report. Matching Tennessee’s pace would have produced more than 500,000 additional homes.
“Californians are meeting the costs of this administrative district with that burden of $55,000 a year – higher housing costs, higher utility bills, infrastructure delays, consultation dependencies, and reduced affordability,” said Jenny Rae Le Roux, director of CAL DOGE and a Republican congressional candidate in Orange County.
“It is impossible for any leader to address all the issues that Californians care about without addressing the primary vote.”
The report identifies the California Environmental Quality Act, or CEQA, as a major regulatory framework affecting housing, infrastructure, transportation, and energy projects.
The report’s authors say projects often face environmental impact reports, cumulative impact analysis, mitigation requirements, redesign costs, and exposure to lawsuits.
Hilton pointed to the Capitol during a press conference and accused the Newsom administration and state lawmakers of red tape.
“We will never reach our goals,” he said, without hesitation.
