Steve Hilton Warns of ‘Dangerous Complacency’ in California

Investment is not coming to our state warned Steve Hilton Thursday at a press conference at the Capitol. “If we don’t change the direction, we are headed for economic disaster in California,” he added, noting that many business owners and entrepreneurs tell him this explicitly and regularly.

“Taxes, regulations, endless harassment with every business with Newsom’s lawsuits…” Hilton said. “The people who represent is in this building actually represent their donors.”

Chief Executive Magazine reports annually on the Best and Worst States for Business. Predictably, in their Best and Worst of 2025, California is ranked number #50.

I’ve covered the Chief Executive Magazine annual report on the Best and Worst States for Business since 2014. Even in 2014, Chief Executive reported “California, New York and Illinois continue to rank among the worst three states in 2014, with virtually no change from previous years.”

“The exodus of businesses will become a stampede if Xavier Becerra is elected,” Hilton warned. “He’s fully behind the climate extreme – he’s a creature of the corrupt system here in California. He will give them more reasons to leave.”

“California is already at the top of the ‘don’t want to go there’ list. You would think that the business community would stand up and fight. Instead we see the business lobby in California caving,” Hilton added.

What is he talking about? Last week the Cal Chamber announced they were endorsing Xavier Becerra in the November general election for governor. Immediately I pictured the Cal Chamber board of directors cowering under their conference room table.

“Cal Chamber going along with Becerra is learned helplessness, given that California has the worst business climate,” Hilton said. He must have a similar imagination to mine. “How they say they want more of that – utter quizzlings.”

“It’s a display of utter cowardice on behalf of the Cal Chamber.”

This has been a serious problem with the business lobbying associations in California, going back two decades when AB 32 was passed and signed into law. Someone tell them that they don’t really have a seat at the table any more. Cowardice, indeed. With nothing to lose, they should be calling press conferences to expose everything Democrats are doing.

During his presser, Hilton said Gov. Gavin Newsom and Democrat lawmakers love to point out that California has “the world’s fourth-largest economy.” Yet California’s government has grown exponentially, while the private sector is fleeing the state.

Hilton said we may be a large state, but “California today suffers the highest poverty rate, the highest unemployment rate and the highest cost of living in America. California families and businesses pay the highest gasoline and electricity prices in the continental U.S., nearly double the national average. Last year U.S. News & World Report ranked California 50th out of 50 states for opportunity.”

Hilton addressed Fareed Zakaria’s blistering indictment of California’s government, and described the state as “one of the most dynamic places on the planet” — with Silicon Valley, Hollywood, top universities, agriculture, ports, talent, and natural beauty — but called it “a case study in how a rich society can spend more and more while producing less and less of what its ordinary citizens need.” The core paradox: “a successful economy attached to a failing model of governance.”

Zakaria, who works for the Washington Post and CNN, took many by surprise.

California is one of the most dynamic places on the planet.

But it is a case study in how a rich society can spend more and more while producing less and less of what its ordinary citizens need.

My take: pic.twitter.com/a8LGEhWCdd

— Fareed Zakaria (@FareedZakaria) June 14, 2026

Zakaria said since 2000, California’s population grew minimally, but general fund expenditures rose over 200%. Per-person spending jumped from roughly $2,300 to $6,300. Zakaria asked: “Does anyone think that California government and its benefits have gotten 200% better in the last 25 years?”

Nope.

Yet when Xavier Becerra sat down with Elex Michaelson of CNN for an interview, he said he’d change nothing in California.

Fox11 reported:

“Michaelson also asked repeatedly what specific policy changes he would make and he didn’t give a specific answer, but talked more about his process for governing and repeatedly talked about the concept of ‘scrubbing’ problems.”

“When Michaelson asked what he’d do differently than Gov. Newsom, he didn’t mention a clear policy distinction.

“‘We’re going to move, we’re not going to wait, we’re going to build and we’re going to execute,’ he said.”

Hilton hit on California’s high taxes, and that the Legislature is currently passing more taxes. And he addressed that even with the ever-increasing high spending, state government fails to deliver core services like housing, education, and public safety.

The diminishing quality of life for taxpaying California citizens, is in contrast to the tech industry, largely propping the state’s tax revenues up, but serves to mask the state’s horrific governmental dysfunction.

“We can no longer assume that great weather and natural beauty will keep business in California,” Hilton said. “Many CEOs and founders have told me that if we don’t change direction this year, they are heading out.”