The Montgomery Summit• Mar 16, 2026• 33:17ConferencePanel

Future of California with Mayor Matt Mahan, Rick Caruso & Steve Westly

From The Montgomery Summit · 2026

Steve Westly(Moderator, The Westly Group)•Rick Caruso(Panelist, Caruso)•Matt Mahan(Panelist, San Jose Mayor)

Executive Summary

California presents a paradox: it is the world's fourth-largest economy, yet it suffers from a poor business climate, high cost of living, and failing public services like education.
Speakers argue that government inefficiency, over-regulation, and high development fees are primary drivers of the state's housing crisis, homelessness, and economic challenges.
Proposed solutions center on a pragmatic, market-oriented approach, including reducing regulatory burdens, increasing accountability in government, and empowering effective private and non-profit organizations.
The discussion highlights successful local initiatives, such as San Jose's reduction in development fees to spur housing and its data-driven approach to public safety, as models for statewide reform.

12 quotes

Concerns Raised

Government inefficiency and over-regulation are stifling growth and increasing costs.
California's public education system is failing despite a massive budget.
The high cost of housing and living is driving residents and businesses out of the state.
Government spending on homelessness is highly inefficient, costing up to $1 million per person in LA with poor results.

Opportunities Identified

Reducing development fees and streamlining approvals can significantly increase housing supply.
Empowering and funding effective non-profit organizations can deliver social services more efficiently than government agencies.
Implementing accountability and performance metrics in public services can improve outcomes.
Electing pragmatic, centrist leaders can break through political gridlock and enact common-sense reforms.

Key Themes

The California Paradox

California is an economic titan with a GDP larger than Germany's, yet it ranks near the bottom of US states in business climate, education, and has the highest unemployment and a severe homelessness crisis. This contrast between massive economic output and declining quality of life and governance is the central tension of the discussion.

This framing highlights that wealth and economic growth alone do not solve fundamental societal problems and suggests that policy and governance are critical factors.

Government Inefficiency and Regulatory Burden

The speakers contend that state and local governments are failing to solve key problems despite massive budget growth. They blame excessive regulations, high fees, and a lack of predictability for stifling housing construction, driving businesses away, and increasing the cost of living for residents.

This theme points to specific policy levers—such as development fees and the approval process—that are seen as direct impediments to progress and targets for reform.

The Power of Accountability

A core belief expressed is that a lack of accountability is at the root of failures in education, homelessness services, and crime prevention. The speakers advocate for implementing performance metrics and consequences for underperformance in public institutions, similar to how a business is managed.

This suggests a shift in public administration philosophy from focusing on inputs (budgets) to focusing on outputs (results), which has significant implications for policy design and evaluation.

Pragmatic Centrism vs. Political Extremism

The conversation criticizes the political polarization that pushes candidates to the far-left or far-right, arguing that effective, common-sense solutions are found in the center. The speakers champion a pro-growth agenda that focuses on results over ideology to solve the state's most pressing issues.

This identifies political polarization as a key obstacle to effective governance and suggests that future progress depends on finding leaders who can build broad, moderate coalitions.

Non-Profit and Private Sector Efficacy

The speakers highlight examples of private and non-profit organizations, such as Catholic schools and homeless missions, that deliver superior results at a lower cost than government-run programs. They argue for redirecting public funds to support these proven models rather than creating new, inefficient government bureaucracies.

This challenges the conventional wisdom that government is the primary agent for solving social problems and points to public-private partnerships as a more effective and efficient alternative.

Get started free

Topics

California Economy State Governance Housing Crisis Homelessness Public Education Business Climate Regulatory Policy Development Fees Public Safety San Jose Los Angeles Gubernatorial Race Cost of Living Non-profit Effectiveness Political Polarization

Processed Apr 19, 2026 yt-dlp + mlx-whisper + Gemini