Steve Hilton, the leading Republican in the race for California governor, accused Gov. Gavin Newsom’s administration of allowing an explosion in regulatory red tape and burdensome laws that have prevented the Golden State from becoming the third-largest economy in the world.
“All we need to do to beat the Germans and become the third biggest economy in the world is put the bloated nanny state bureaucracy and all of its regulations into the wood chipper,” Hilton told The California Post Wednesday outside of the Capitol.
California’s sprawling regulatory system, Hilton argues, has grown into an unelected arm of government that is driving up housing costs, utility bills, and business expenses while making the state less competitive than faster-growing states.
A new report by Hilton’s CAL DOGE initiative notes that California government code now contains more than 420,000 regulatory restrictions compared with 274,469 in Texas, 170,321 in Florida, and 121,620 in Tennessee.
A cost benchmark specific to California estimated the state’s total annual regulatory burden at $493 billion in 2007 dollars. Adjusted for inflation, the CAL DOGE report says that figure equals about $745 billion annually in current dollars, which translates to approximately $55,000 per household.
Hilton called the situation an “absolute nightmare of bureaucracy that is absolutely strangling anyone 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.”
