Steve Hilton: Big Numbers, Borrowed Time

The Hedge — Brutal Honesty Over Hype Since 2008

The Pitch

Steve Hilton’s “Cali-ffordability” agenda: eliminate state income taxes on the first $100,000 earned, deliver $3/gallon gasoline, cut electricity bills by 50% through deregulation, cap developer impact fees, restrict CEQA lawsuit standing, and run an anti-fraud crusade called “Cal Doge.” He leads Republican polling and has Trump’s endorsement.

What He Gets Right

Developer fee caps and CEQA lawsuit reform are legitimate policy levers with bipartisan support in principle. The income tax proposal identifies the right problem: California’s tax structure punishes the working and middle class who can’t afford to leave.

The $3 Gas Problem

California gas is expensive because of a thin, California-specific refinery market, state-mandated fuel blend requirements, cap-and-trade costs, the Low Carbon Fuel Standard, and the highest per-gallon state excise tax in the nation. Eliminating every state gas tax component gets you perhaps $0.90/gallon toward that $2+ gap. The rest requires either federal action, massive refinery investment, or overturning California’s own air quality regulations. Hilton has not explained the mechanism.

The 50% electricity cut has the same problem at larger scale. Wildfire liability, grid hardening, and transmission infrastructure are physical costs already baked into the grid. You can’t deregulate your way out of them.

The Funding Gap

“Fraud elimination” and general spending cuts have never come close to closing an income tax revenue gap of this size anywhere. The numbers require either massive service cuts or deficit spending.

The Bottom Line

Hilton is running in a state that hasn’t elected a Republican governor since Schwarzenegger left office in 2011. His platform is designed to sound maximally different. Whether the math holds up is a separate question — and on the specifics, it doesn’t.

Rating: The best Republican salesman in the field. The promises outrun the physics.

— Timothy McCandless | The Hedge | timothymccandless.wordpress.com