Who will be California’s next governor? | The Economist

Election Context & Dynamics

• A California runoff in November is likely, with one candidate potentially being a Republican endorsed by Donald Trump.
• The race centers on the state's affordability crisis, specifically housing costs and regulatory burdens.
• Voters are choosing from dozens of candidates, with a focus on whether California's "dysfunctional" reputation is a fair caricature or a Republican political strategy.

Critique of California's Governance

• Ballot Measures: Decades-old laws passed in the 1970s to protect the environment and ensure good governance have been co-opted by interest groups (environmentalists, labor, neighbors) to slow housing and infrastructure development.
• Fiscal Health: The state budget has "exploded" under Governor Gavin Newsom; a Legislative Analyst's Office report attributes rising costs to inflated existing program expenses and increased employee compensation rather than new programs.
• Structural Deficits: The state faces recurring structural deficits, requiring the governor annually to find funding to plug budget holes.
• Demographic Shift: High costs and housing inaccessibility are driving out-migration, which dilutes California's democratic power in Congress.

Candidate Analysis: Tom Steyer (Democrat)

• Campaign Spending: Steyer is spending 20 times more on advertising than his nearest competitor, Democratic incumbent Xavier Becerra, including significant expenditures on social media influencers.
• Policy Positions: He holds progressive stances including antagonizing corporations (specifically big oil and energy utilities) and advocating for single-payer healthcare.
• Specific Plans: Despite his progressive label, Steyer has proposed a pragmatic plan to reform specific ballot measures distorting the housing market.
• Voter Sentiment: Support is described as "holding their nose," with voters acknowledging his wealth but selecting him for the progressive alternative rather than enthusiasm.

Candidate Analysis: Xavier Becerra (Democrat)

• Background: Former Congressman, California Attorney General, and Secretary of Health and Human Services under Joe Biden.
• Reputation: Carries a Washington reputation as a "lightweight" effective at constituent service and performative litigation but less effective at high-level governance.
• Campaign Strategy: Lacks specific policy details on affordability and housing; viewed by voters as a "safe" choice following panic over the potential for a Republican runoff.
• Strategic Voting Concerns: Critics suggest tactical voting is replacing preference-based voting due to the fear of Democrats being shut out of the general election.

Candidate Analysis: Steve Hilton (Republican)

• Endorsement: Backed by Donald Trump, who holds deep unpopularity in California yet saw high vote totals in the state.
• Economic Narrative: Claims 16 years of one-party Democratic control have resulted in the highest poverty rate in the U.S. and the highest unemployment rate of all 50 states.
• Tax Proposal: Proposes eliminating state income tax up to $100,000, followed by a flat tax rate on income above that threshold.
• Justification: Argues current high earners ($75k–$95k) pay higher state tax rates (9.3%) than top earners in most other states, necessitating tax relief to retain businesses and workers.
• Political Dilemma: Hilton cannot clearly distinguish his policy views from Trump's, limiting his ability to present himself as an independent, pragmatic centrist to the broader electorate.

Broader Political Trends

• Republican Strategy: Republicans have an incentive to portray California as a "dystopian hellhole" to contrast their governance model against the "alternative governance" represented by the state.
• Historical Precedent: No Republican has won a statewide office in California since Arnold Schwarzenegger; past successful Republican candidates were typically moderate centrists.
• Voter Registration: Democrats hold a two-to-one registration advantage, with independent voters roughly equaling Republican registration numbers.
• Candidate Field: The current field lacks a "superstar" figure, following the tenure of high-profile governors like Schwarzenegger, Jerry Brown, and Gavin Newsom.

Forward-Looking Statements

• Steve Hilton projects that if every Trump voter from 2024 supports him in 2026, he will win the runoff with a significant margin.
• The election outcome will test whether the "caricature" of California's financial ruin is a viable winning message or if the state's status as an economic powerhouse will drive voters to maintain the status quo.