How Matt Mahan Thinks He Can Save California

**David Sacks** (0:00)
Matt Mahan, welcome to All-In.

**Matt Mahan** (0:02)
Thanks, David.

**David Sacks** (0:03)
I have no idea who you are. Who are you? I mean, you're a guy who kind of popped up running for governor of California last minute. How'd that come about? And who is Matt Mahan?

**Matt Mahan** (0:13)
Well, David, like everybody, I'm frustrated with the state that keeps spending more and seemingly getting less, which is why I jumped in. But to back up, I grew up in a little farming town here in California, a town called Watsonville, where your strawberries come from.

**David Sacks** (0:24)
I do work in Watsonville.

**Matt Mahan** (0:25)
Driscoll berries, you know it well.

**David Sacks** (0:27)
I got greenhouses, yeah.

**Matt Mahan** (0:28)
Yeah, exactly. Working-class family, mom was a teacher, dad was a letter carrier. My lucky break in life was getting into a great college prep high school on a work-study scholarship. I took buses about two hours each way, worked my way through high school and college, and came back as a public school teacher through the Teach for America program. Always was very community oriented, was interested in politics, wanted to know how to make our city, our world a better place. Ended up in the tech sector and spent about a decade building civic tech tools to help people navigate their democracy.

**David Sacks** (0:59)
What did you build?

**Matt Mahan** (1:00)
I was involved with an early Facebook application called Causes, and then went on to start a platform called Brigade that was sort of like LinkedIn for voters. And the whole premise was to build grassroots bottom up power by connecting voters around issues they're passionate about, outcomes they want to see, and help them organize to hold their elected officials accountable. After about a decade in the civic tech space, or a company was acquired, I decided to run for city council, and I went out and knocked on 10,000 doors, got yelled at for a lot of things that I wasn't necessarily responsible for, but I got a real feel for the common sense of the residents of California who would ask questions like, if I'm paying $20,000 a year in property taxes, why haven't my local roads been paved in the last 15 years? And I thought that made a lot of sense. So I went to City Hall to try to find out.

**David Sacks** (1:51)
How dysfunctional is California? And how did it get this way?

**Matt Mahan** (1:56)
Pretty bad. I'm really worried, which is why I jumped in. I think the state is heading toward an inflection point past which there may be no return. We have increased spending in state government by 75 percent. But then in perspective, that's $150 billion more this year than six years ago. And as far as I can tell, none of the outcomes have gotten better. Never mind 75 percent better. Many of them are flat or down over the same time period. So there is a real lack of accountability in government. We don't have a money problem in Sacramento. We have an incentives problem. We have a structure that allows us to keep shoveling more money into things that aren't working. Just take high-speed rail. If a startup took 20 years, spent $14 billion and didn't deliver a product, people would have been fired a long time ago.
And we're just not seeing that level of accountability in our state government.

**David Sacks** (2:50)
Is this theft? Where does the money go? $14 billion. Who has that $14 billion today?

**Matt Mahan** (2:57)
It's contractors, it's lawyers. Some of it has gone into actually building the project. But belatedly, what happens in California, and the reason we can't build, we can't do big things anymore, is that we've got endless process, years of environmental review, the most litigious environment imaginable, anybody can sue under CEQA. You don't even have to be a resident of California to sue under CEQA. And so you just get years of litigation, bureaucracy. When it comes to housing, just to slightly switch topics, the fees that cities can assess, one-time fees can add 20% to the cost of a project. So we've just, we've bureaucratized the state to the point where it's total paralysis. We can keep spending more and more and not getting anything for it.

**David Sacks** (3:40)
It's like I'm trying to understand as a citizen and a tax payer, I pay a 53% tax rate living in California. I pay my federal tax and my temporary California tax, which I've been temporarily paying for 11 years. And I'm paying 53 cents of every dollar I earn to the state and to the federal government. I'm like, where'd my money go? It's such a mind-boggling number. Pick the high-speed rail project alone. $14 billion.