Steve Hilton talks to LAist about why he should be California's next governor (Transcript)

Here's a transcript of the conversation that took place April 7 as part of an AirTalk series with candidates.

Austin Cross: Steve Hilton. He's a British-born political strategist. He helped shape the United Kingdom Conservative Party under David Cameron. Then he moved to the Bay Area, became a U.S. citizen, spent years as a host on Fox News. Steve Hilton is with me now. Thanks so much for coming on AirTalk.

Steve Hilton: Of course. It's a great joy and honor, honestly. I love the show. I, as you mentioned, I live in the Bay Area, but spent a lot of time in L.A., many happy hours driving around listening to the show. So very happy to be here with you.

Who he is

Austin Cross: Love that. Thank you so much for saying that. A lot of people might not be familiar with you, what you stand for.

Talk to us about who you are and why you wanna do this.

Steve Hilton: The first point is that I'm not just a proud American, but a really proud Californian. I love this state so much as we all do. And since we moved here in 2012 with my wife and my sons, I've taught at Stanford and started a business and had this new career very unexpectedly in the media, as you mentioned, and I just feel that, like so many other Californians, we've got so many great advantages in this state.

We've got everything going for us. But the last 16 years when we've had one party rule, one party in control of all the statewide offices, two-thirds majority in the legislature, all the big cities, all the big counties, if we just look at the results of that, it's clear that something's not working.

We've got the highest poverty rate in the country, tied with Louisiana. We've got the highest unemployment rate of all 50 states, the highest cost of living by far. Everyone listening, you experience that every day. The cost of gas and rent and utilities, everything is just so expensive. And I think the question then is what can we do to change things?

And the real answer to the question, what am I all about, is actually that most of my career has been in business. I've been a small business owner, started restaurants, worked all over the world in business, and that really captures, I think, my attitude to things, which is basically pretty pragmatic, problem-solving, not ideological.

I just think we need some common sense approaches to some of these problems rather than using political ideology to define what we do. And I think that is really what I'm all about, making sure that we really address the needs of particularly the people who've been hurt the most in recent years, which is working people, working families, and small business.

That's really who I'm fighting for.

Austin Cross: I wanna dig down on some specifics, because when you did arrive in California about 14 years ago, you called it an inspiration. And now you're calling it one of the worst run states in America. What specifically has gone wrong in your view?

Steve Hilton: I think both those things are true, actually.

There's something about California, quite apart from the physical things that we can all see and the things that are all around us, our magnificent natural beauty, and the weather, and our diverse cultures and people, and our great cities and towns, and all those things exist in the real world that we can see.

But there's something deeper than that, I think that we have in California, which is our spirit. There's a kind of rebel spirit about the state. That's why I think over the centuries now, we've created so many incredible, iconic industries and things that have shaped the world from, obviously, the entertainment industry here in L.A. to the tech industry in the Bay Area where I am, our incredible ag industry in the Central Valley, turning that into the world's most fertile and productive farm area.

All these incredible things. Down in San Diego, life sciences. We just have amazing things going on, but I think we're being held back by a government that's just, I think, become too intrusive.

It's impossible to build manufacturing facilities in a reasonable timeline, and so blue-collar jobs are going to other states.

Electric bills are more than double the national average, putting pressure on every small business and every family. All these things are just the reflection of, I think, an approach to government which has just got too much micromanagement, I think of everybody's lives. And I think the cost of that, both the literal cost in terms of the size of the government growing and the taxes that are therefore needed to pay for it, but also the burden of all the regulations.

It's just the hassle of doing anything. Of running a small business in California, it's just so much harder than anywhere else in America. And I think that's the real goal here is to try and reduce those burdens on people.

His tax plan

Austin Cross: You mentioned regulations. Your housing plan would cut fees, freeze new housing regulations for about five years.

And then your tax plan would cut $60 to $65 billion in state revenue. That's by your campaign's numbers. That reduces two major funding sources for things like schools, roads, Medi-Cal. How do you pay for those things? Where does the money for the basic services come from in your plan if those fees are waived and if the taxes are cut so significantly?

Steve Hilton: Actually, let's start with the reason for doing that. The first part of my tax plan which is incidentally something that Katie Porter, one of my Democrat colleagues in the race agrees on, and we share this position is that we've got to reduce taxes for working people. You've got people earning, salaries and incomes that are just really don't get you very far in California because of our costs, 70 grand, 80 grand, 90 grand a year, paying 9.3% state income tax.

That's higher than the top rate in many other, in most other states. And so my plan starts with eliminating state income tax for everyone earning below $100,000. Now, how's that gonna be paid for? You're right, we have to reduce spending. There's two parts to that answer. First of all, there's as we're seeing, even from studies by the state auditor, for example, and others in the current administration here in California, there's a lot of waste and fraud and abuse in the system.

Our estimate of that is that over the last five years we've had $425 billion of waste, fraud, and abuse.

Austin Cross: How did you get that number? If I could just check on that, because that is a number that we've heard a few times. That number is not from necessarily an official source. How did you come up with that number?

Steve Hilton: It's compiled from official sources. You're right that it's not one official source, but it's taking together all published data, for example, from the state auditor, which estimated $24 billion in state spending on homelessness can't be properly accounted for. You've got the EDD data, the Employment Development Department, on the amount that was lost during the pandemic in terms of payments for employment benefits there are other studies, for example, the error rates published in Medi-Cal.

So, it's a combination of official sources, and it averages out. It's not smooth over that five-year period, but it's an average of about $80 billion a year, which is about 20% of the budget, and those are very high numbers. But if you think about what's happened to the state budget, it's nearly doubled in the last 10 years, in the last seven years, actually.

And Matt Mahan, who you've who will be joining you later in the show, he makes exactly the same point. I think the way he puts it is that the state budget has increased by 75%, I think that's his number, in the last six years. And what have we got to show to it? On most outcomes, we're doing worse.

So the first part of the answer of how you cut spending is to find the fraud and the waste and cut that out of the budget 'cause that's not delivering any benefit to anyone. The second part is to get better value for money for what we do spend.

You mentioned specifically roads. I was with a contractor. She runs a company that does public works contracting. They actually build public infrastructure and build roads. And she told me that it costs four times as much to build the exact same piece of road in California as it does in Texas.

Four times as much. And that's because, again, of these often well-intentioned regulations that have been layered into projects. For example, project labor agreements that require union workers only and what they call prevailing wage, which is much higher than market rate wages. Community workforce agreements, which require very specific hiring practices.

Environmental reviews and audits and inspections that just add a lot of cost and delay in the process. So I think we need to just make sure that the money we're spending is actually really delivering results rather than getting lost in a whole bunch of process and bureaucracy.

Austin Cross: I will say on your characterization of roads, one of the differences between California and Texas is just how smooth the roads are. And I believe there's a lot of data that says the smoother the roads are, the longer they can go before you have to replace them, and I believe that was a thought process when it came to determining just how much or what specifications, rather, a road needs to meet.

Steve Hilton: I know, but the data shows that we've got the worst roads in terms of quality of the road surface in the entire country. We're 50th out of 50 on that.

Austin Cross: I wanna circle back really quickly. I know there's a number of factors that come into that.

Just on your tax plan, your cuts, the $65 billion your number about waste, fraud, and abuse my thought is if that real number is in fact smaller though, if your budget math still works, if a tax plan on top of housing fees cut works in a situation where, in fact, when you really examine where the money's going, maybe it's not what one would consider waste, fraud, and abuse, it's actually things that maybe have legitimate purposes. What happens essentially if your budget math doesn't work?

Steve Hilton: That's the process of putting together and negotiating a budget. The governor proposes the budget. My first budget will have that at its starting point.

And then we'll, It's a process. You send that to the legislature in January negotiate, comes back in May. It's called the May revise. We're about to see that from Governor Newsom and that is the process of working with the legislature to get a good outcome. The actual cost of the first part of my tax plan, which is the 100,000 tax-free, no state income tax for people earning below 100,000, is a much smaller cost.

Katie Porter actually went in our conversations about this and her estimate of the cost of that is $8 billion. It may be the case that we start with that, which is obviously the priority for me, working people who are really being squeezed. The remainder of my tax plan, which is a flat tax of 7.5% over 100,000, which is more geared towards encouraging enterprise and businesses to stay in the state and to come and invest here and grow here that's something that clearly will need to be negotiated.

I think there'll be, frankly, less obvious consensus around that with the legislature than there might be for the first part of the plan, the 100,000 tax-free.

On his support from President Donald Trump

Austin Cross: It's AirTalk on LAist 89.3. I'm Austin Cross talking live right now with Steve Hilton, a Republican candidate for California governor.

Steve Hilton, Donald Trump, President Trump did endorse you. I'm curious your view as to whether or not that endorsement helps you or hurts you in a state where he's lost by nearly 30 points in the past.

Steve Hilton: The first thing I'd say is that I didn't ask for his endorsement.

I certainly didn't expect it. I didn't expect the president to weigh in on this race, but I'm greatly honored to have it. And just on a human level remember, I'm a new American citizen, moved in, as you mentioned, in 2012, became a citizen in 2021. There's just something deeply that it's a deep honor for me, just on a personal level, to be, to have that endorsement from the president of the United States.

It just means a lot. In terms of the specifics, I think the argument that I would make, which is why I think it is helpful, is to say to Californians that it's a good thing to have a candidate and then a governor who has a good relationship with the president. So many of the things that we wanna get done in California to benefit Californians would go better if we had a constructive relationship with the federal administration.

And it's not just the president, actually. I have good personal relationships with many of the members of his cabinet, and I think we'll be able to get to work quickly to actually deliver positive results for everyone in our state.

Austin Cross: Are there any policies on which you disagree with the president?

Steve Hilton: Most of the policies that he's pursuing in respect of California I think would be very helpful to us. If you look at just some of the things that come to mind where I would agree with the direction coming from the federal administration and Gavin Newsom and Rob Bonta, the attorney general, fighting back for example, on energy, I think that we obviously need to get our gas prices down.

Most people in California drive gas cars. I understand that, people prioritize EVs, but actually EVs represent only 7% right now of the vehicles on our roads. Most people are paying these enormously high gas prices, a particularly regressive form of taxation, as it were, because it's just hurting the working class Californians who are driving their cars and trucks a lot every day.

One part of reducing gas prices is opening up our own domestic oil and gas production in California rather than importing oil from halfway around the world at much greater cost. The president and his team wants to do that. Gavin Newsom is resisting that, and so I, I think that's hurting Californians.

Austin Cross: Steve Hilton just with a brief amount of time, I don't mean to interrupt you, but I do want to ask, just to come back to that question, if there is any policy on which you disagree with the president. I will point out one, for example, a number of immigration raids here.

Undocumented immigrants despite the pushback from the president, they do play a very large role in our economy here. Statistics, official numbers that have come out show that a large percentage, if not the vast majority of people who have been taken in do not have a criminal record, despite what the president has said.

Is that a policy that you support? And how does California's economy, I'll take it a step further, How does California's economy maintain its strength or even grow if a large percentage of the population who's making our agricultural industry work, and so many others is afraid or is suddenly no longer available?

Steve Hilton: I think that there's a couple of things there. It's a very important, deep issue, and actually this is something that Katie Porter, I mentioned earlier, disagreed about in one of the debates this week, where she argued that most of our growth in recent years had come from illegal immigration.

I just don't think that's a healthy way for a society to grow and prosper. I think that it's clear that immigration policy is set, constitutionally clear that it's set by the federal government. The federal government was elected by the American people pretty decisively in 2024, and I don't think anyone could have been in any doubt about the immigration policy and approach that Donald Trump was proposing, which he's now implementing, and that there's a mandate for that.

The question is, as governor, would you actively obstruct the enforcement of the law that was made by Congress and is being enforced by the government that Americans elected, and my answer to that is no. In terms of the specifics on employment and the labor market, I think we've just got to be realistic about something.

As I mentioned earlier, we have the highest unemployment rate in the country. If you look at the labor force participation rate, which is in a way an even more important measure, it's historically low in California. It's about 62%. At its peak, it's been nearly 70. What that means in practice is that we've got around about 4 to 5 million Californians who are of working age, able to work, who are not working.

In many cases, they're not working because they're able not to work because they can make a living on welfare. I'll give you a specific example from the agriculture industry. I was up in, near Modesto in a town called Hilmar, a big dairy town at the northern end of the Central Valley. I was talking to some dairy workers there, not making a huge amount of money, 50 grand, something like that.

They were telling me that their girlfriends, none of them work, and they all make more money than them on a range of different benefits that are available, both federal and state. I just don't think that's healthy, and I think we've got to be realistic about our economy, that we shouldn't keep depending on the importing of illegal immigrant workers when we have millions of Californians who could be working but aren't.

On immigration

Austin Cross: The thought, though, is that many of these jobs — especially these heavy labor jobs that don't pay very well, sometimes even predatory wages, often off the books — people aren't exactly standing in line to do those jobs. How do you respond to those concerns that, again, if a large number of people are either afraid to go into their workplace or they are removed from the workplace, how does California's economy remain strong when, like it or not, they are in large part a, a backbone of what keeps California operating?

Steve Hilton: But, your starting point there was that Californians don't wanna do the jobs, and that's why we need to have imported workers. Actually, even in the industries where you have the highest penetration of illegal immigrant workers, for example, in agriculture, more than half are still Americans, if you look at the data across the country.

In certain areas, it's a bit higher. So this argument that you hear often, which I think it's a very patronizing and frankly insulting sentiment, is jobs that Americans won't do. I think America is a country, and California is a country where we understand that you've got to work hard to get on and to bring opportunity to yourself and your life and your family, and I think we've lost a bit of that.

And I don't think it's OK for taxpayers who are really, hard-pressed because of all the other costs of everything, are paying money from their taxes to finance Californians not working, and then on top of that, to fill the gap, importing illegal immigrants who then put pressure on services like schools and hospitals that they also pay for.

So I just think that this whole system is actually really out of balance in a, in an unhealthy way. And I think we need to be honest about that. Specifically on agriculture as well, I'll just mention one other point. I was just this week, I gave-

Austin Cross: Just to be clear, Steve Hilton, I just want to point out a number from the Bureau of Labor Statistics.

Again, not to interrupt you, but I do want to keep moving forward. Bureau of Labor Statistics says the unemployment rate in California as of February 5.4%. The highest rate is in Imperial County at just over 18%. It doesn't read from those numbers that there's a large percentage of people, we can't say exactly why those people are not employed, but whether that would be an effective or efficient solution to the potential loss of people in an industry.

I want to give you just about 10 seconds to respond, 'cause I do have other questions, including one from one of our listeners.

Steve Hilton: Yeah. Look I think that there's a basic common sense point, which is to say that in California, everyone who is able to work should work to earn a living. That's what life is about, and you shouldn't expect to be paid not to work, and then, and to fill the gaps there to import foreign workers when we got people here who could be doing those jobs.

I think that should be the priority.

On affordability and housing

Austin Cross: It's AirTalk on LAist 89.3. I'm Austin Cross, talking right now with California gubernatorial candidate Steve Hilton. He's running as a Republican. Steve, Peter in Pasadena wrote in, he says, "Steve Hilton worked closely with Prime Minister David Cameron, and at the time was vocally against public welfare policies. Could you have him address this part of his past and whether that would impact his solutions to the affordability crisis in California?"

If you could just take about a minute to respond to that Mr. Hilton. I do have other questions for you as well.

Steve Hilton: Yeah. It's actually really an echo of what I've just been saying in respect of employment in California.

I don't think it's a question of being against welfare policies. It's being in favor of fairness, that taxpayers who work hard, pay their taxes, expect that money to be spent on services that are there for everyone to benefit from, and shouldn't be there for people who actually wanna take an option of not working.

And I think the point of welfare should be to help those in real need rather than to subsidize those who actually could be taking care of themselves.

Austin Cross: You championed a 2023 ballot initiative to reform housing approvals. It didn't make it to voters. What makes you confident that you can build the coalitions that you're going to need to build as governor?

Steve Hilton: Funnily enough, these debates and conversations we're having and forum, in fact, one of the nicest events we've done as candidates I'm sure Matt will testify to this, is an event we did together. It wasn't a TV debate, but it was a forum organized by I think it was the Realtors or House Builders, something like that, in Sacramento.

And there's a large degree of consensus between myself, Matt Mahan, Tom Steyer, Antonio Villaraigosa I believe was there, and Katie Porter, on some of the things we need to do to make sure that we bring housing costs down. Permits and accelerated permissions is one of them. The specific ballot initiative I tried to put together also focused on impact fees, which maybe people aren't aware of, but it's effectively a hidden tax on housing.

The Terner Center in Berkeley, at UC Berkeley, one of the leading expert centers on housing in California, estimates that impact fees, as they're called, can now make up to 20% of the cost of a new home, and so that's something we need to really cut back on. Matt Mahan agrees with that.

I think the part where we disagree is I think we do need to challenge this ideology of density, where the only thing that we really are favoring in terms of construction is multifamily housing, apartment buildings in the existing development area, all because we don't want to expand outwards, so we limit car driving.

I think that is what's driving up the cost in a lot of areas. This also means that we're not building the kind of homes that young families in particular want when they're starting out on life. I published a plan just the other day on how we can get back to building starter homes, smaller homes, 1,000 square feet rather than, let's say, 3,000, for a young family that's much more affordable, a single family home so kids can play outside and enjoy the California weather.

And I think that's the approach we need.

On the 2020 election

Austin Cross: Before we hit our time here at the debate this week, you would not say whether President Trump lost in 2020, and I'm going to really have to push you for a direct answer on this. Did President Trump lose in 2020?

Steve Hilton: I think two things can be true which is number one —

Austin Cross: Either he won or he lost, the results were certified correct?

Steve Hilton: Exactly. So Joe Biden was clearly the certified winner of the election, but I think it's also true that 2020 election was a very unusual, very messed up election. We had the pandemic, you had the lockdowns, you had all sorts of last-minute changes made to the election system, especially in California, which has prompted a lot of mistrust in our system because it would seem that these changes were made for partisan advantage.

I think it's very important that we restore faith in our elections. That's why, for example, I'm a strong supporter of the ballot initiative this year on voter ID in California. I don't think that’s a bold-

Austin Cross: Just to be clear, mistrust of the system is one thing. Outright denying that he lost, as President Trump did for a very long time until it could be denied no longer, is another issue entirely. So I do wanna come back to you again on whether you believe in your heart of hearts, did President Trump lose in 2020?

Steve Hilton: I think that the point I make is the same one, which is that you've got clear you've got a clear position on —

Austin Cross: I hate to push you for a yes or no, but I think that this is something that nine out of ten people could yes or no me on here. And we have just about I'll say 10 seconds left. Yes or no?

Steve Hilton: I don't agree with you. I think there are millions of Californians who actually have major concerns about how that election was conducted. And rather than sweeping them under the rug, I think actually we should be working to restore people's faith in our elections-

Austin Cross: But your personal belief and conviction. What is yours?

Steve Hilton: My belief is that the election was carried out in a way that was designed for partisan advantage by Democrats in terms of, for example, Look, you have nine million ballot, nine million people on the voter... This is according to the state of California's state database-

Austin Cross: Steve Hilton, I'm afraid we might be at time right now. I really appreciate you making the time to come on AirTalk today. Steve Hilton, California, running for California governor as a Republican. I really thank you for taking the time to have this conversation, Mr. Hilton.

Steve Hilton: Pleasure. Thank you very much.

This transcript has been edited for grammar and clarity.