- The reason we're getting tech workers and tech company founders and others to jump on the campaign immediately is they've seen the results we've delivered in San Jose.

We have literally led the state in reducing crime and reducing homelessness.

We've just unblocked thousands of new homes.

I think people want results, and it isn't just people in tech.

I'm going around the state and I hear from ag from people in Hollywood and every industry that they're getting frustrated with the state that keeps asking for more revenue without actually delivering better outcome.

- Hey, everyone from KQED in San Francisco.

This is Political Breakdown.

I'm Marisa Lagos.

- And I'm Scott Shafer.

Today on The Breakdown, we continue our series of interviews with the many candidates vying to be California's next governor.

Today we're joined by San Jose mayor, Matt Mahan.

He's led the South Bay city since 2023, making homelessness and public safety his top priorities, and getting attention as a rare critic of his own party, including Governor Gavin Newsom.

- Now, the moderate Democrat is getting big support from the tech community as he tries to introduce himself across the state after a relatively late entry into the race.

Mayor Matt Mahan, welcome back to Political Breakdown.

- Good to see you guys.

Thanks for having me.

- Great to have you back here.

We've had you a few times, people can go check out those interviews as well, but we are asking all of our governor candidates an opening question, which is, who are you politically?

What is your vision in this race?

- Yeah, my, you know, I practice the politics of pragmatism.

I grew up in a small farming town.

My mom was a teacher, my dad was a letter carrier.

We didn't have a lot of resources in our community, and I grew up believing that government at its best creates opportunity.

It fixes fundamental problems from infrastructure to public education, to having safe neighborhoods and really facilitating a community's rise.

And I am concerned that in the state of California, we've gotten into the habit of always thinking that we can simply go back to the voters and ask for more revenue without showing results.

And so if I were to summarize why I jumped into this race and what I believe, it's that we need to be able to do two things at the same time.

And we've been doing them in San Jose, and I wanna take it to San Jose.

Number one, we have to fight for our values.

We've sued the Trump administration, created mask bans, and ICE free zones, and have done everything we can to stand up for our vulnerable neighbors, because diversity is one of the great strengths of the state of California.

And at the same time, we have to demand that our government do better before we ask people for more.

The best resistance is delivering results for people.

And to do that, we have to be radically more focused.

So I'm really focused on execution, implementation of policy, how do we make people's lives better with the limited resources we have and grow trust in government.

- So we've got, I think, nine other Democrats running for governor.

How would you say that your experience, your vision, your political orientation differs from them?

What sets you apart?

- Well, my executive experience is definitely a differentiator.

I've had success in the private sector, building small startups and delivering a service to customers and have also had success in an executive function, leading a large city and delivering results for residents.

But in this race, as I look at the field, and part of why I jumped in was it seems like the dynamic right now is a competition on the right for who's more MAGA and a competition on the left for who's less maga.

And look, I'm on the left.

But I think that we need to be not just against something.

We need to be for something, we need to be for a government that really works.

Better public schools, we're underperforming despite spending a lot.

It used to be that California didn't spend enough on education.

Now we've, we've grown in spending, but states like Mississippi and even Louisiana are actually outperforming us on literacy.

- Why do you think that is?

Like, why are we spending more money and getting less for it?

- You know, I think there's this, there's a combination of complacency in our politics, and frankly, we also have highly organized interests that can be resistant to change.

I, I don't - You talking about unions, would you say that?

- I was in the teacher's union and it baffles me that there was a fight over the science of reading and whether or not we should be teaching our children phonics when plenty of other states have proven that it works.

The research is very clear, but we see this in many, in many areas of life.

We have the most overregulated state.

When you look at why it costs us twice as much to build a home as it does to build the exact same home in Colorado, a lot of that is the building code.

It's the impact fees, it's death by a thousand cuts.

And every single one of those is well intended.

It makes sense to have all of the climate protections and the park fees and the affordable housing fees and it all, and the traffic impact fees.

It all sounds great on paper and it's all with good intention.

But the truth is, there isn't enough accountability in our government today.

The way that we rebuild trust in government and frankly reinvent the Democratic party to start growing the tent again, is to be accountable for the outcomes and recognize as is so often the case in California when our current policies simply aren't delivering for people.

- All right.

Well, I wanna get back to some of those policies, but we do wanna hear a little bit about kind of where you came from.

You mentioned you grew up in a farming community.

This is Watsonville, south of San Jose, - Best strawberries in the world.

- I eat them all the time.

I wonder like, how would you describe your home as a kid?

You mentioned, you know, your dad was a mail carrier, your mom was a Catholic high school teacher, I believe, or teacher.

Yeah, yeah.

And you've, you've talked in the past about you guys were really encouraged to talk like politics and religion at home.

What did that look like?

- Yeah, it was, it was a great childhood.

I mean, there were, there were certain stresses.

My neighborhood had a lot of challenges.

You know, my parents frankly argue argued about money a lot because we didn't, we were often paycheck to paycheck, but there was a lot of love in our home.

And as I've mentioned to you before, one of the things I'm most grateful for is that for my sisters and I, when we were around the dinner table, our parents encouraged us to talk about current events, talk about politics, religion.

And they really believed and instilled in us this notion that it's our job to care and to pay attention and to be informed and to participate.

And so I've always been really passionate about civic engagement.

My parents did a lot of things that really shaped my character and that of my sisters.

My dad as a letter carrier, would work six days a week.

He'd get up at five 30 in the morning, leave often before we were awake.

He would generally make it home in time for dinner, which was a special time in our home.

But he worked six days a week until he was 73 years old to help us make ends meet.

And my favorite thing about my dad's story being a letter carrier, is he was really a member of the community.

He knew who every single family was.

He literally knew down to the level of which mailboxes leaked.

And when it would rain, he would put people's mail in a plastic bag that he paid for out of his own pocket.

He had a whole box of these little plastic bags, and he would put it in the mailbox, or when the older folks on his route would let the mail pile up, he'd get out of his, his little Jeep and go walk to the door and check on them.

And, and sometimes he found people genuinely in need.

He once found a woman on his route who was on the floor.

She had fallen down and he had to call 9 1 1.

And so, you know, he really always believed in being active and engaged in your community and, and really trying to look at build relationships with everyone.

And I've, I've tried to take that to heart in my, how I lead as an elected official.

- I think you said your mom encouraged you to attend an elite high school, which was a couple hours away by bus.

What was that transition from public school like for you?

- Well, taking the bus, so I took the Highway 17 express bus and then a local bus in San Jose.

- Sounds like an oxymoron.

It was, yeah.

Yeah.

They were not exactly express at the time, at least, you know, my parents pushed us to expect more and to, to try to better ourselves.

They really did.

And it was, it was always very supportive.

You know, they would, they would pull together just enough money to put us in summer programs and enrichment programs.

And when it came time for high school, I got this incredible opportunity to go to a college prep all boys Catholic school called Bellarmine in San Jose.

And the only catch was because we couldn't afford it.

I had to work the maintenance crew all summer, and as long as I took the bus over the hill every day and did that, they would get, forgive my tuition.

And that long commute was very formative for me.

It, it reminded me of, it taught me the importance of perseverance and hard work and earning things.

It also gave me a lot of time to read the San Jose Mercury News and the register, Paul Haronian.

And I've always been a news junkie and reading the papers every day, got me to think more broadly about the role of government and public policy in making people's lives better.

And I was always struck by the, the difference between my little farming town with its 20% unemployment and high crime rate and Silicon Valley with all of its wealth and upward mobility.

And that really caught my attention at a young age.

- Yeah.

Well, you went to Harvard.

I know you were in the same dorm as Mark Zuckerberg.

You met your wife there and then after college you spent a year in Bolivia.

You taught in Teach for America, as you mentioned, and then you went into tech.

And I'm curious because like, you know, now Mark Zuckerberg is one of the most wealthy people in the world, and you created and worked for these companies that were very like civic minded.

Was there ever a moment where you were like, why am I doing this?

I should be making money along with, you know, my college dorm mates?

- No, I never got into tech to make money.

I thought when I was young and didn't know much about the world, I assumed that the high, you know, my height of my career would be getting into going to law school.

I mean, that was kind of always my dream.

And I even applied to, and got into a number of law schools.

I ended up deferring law school for many years because I thought that my path would be to be a public interest lawyer.

I ended up going into tech at this moment when social media was just getting created because I genuinely believed, and I, I still believe this though, I don't think it's quite come to fruition, that having everyone connected on digital technology lowers barriers to organizing, building power to grassroots level, holding powerful interests accountable.

And so I spent 11 years building technology platforms that put civic tools in the hands of ordinary people to be a counterweight to the concentration of money in politics, the high organization of special interest, whether business, labor or any other interest.

I've always believed that we get the best government and the best outcomes when people connect in their communities and organize around what they want their government to deliver for them.

And technology, just in that moment as social media was first being created, provided a new organizing platform that I found really exciting.

And we did some neat things.

I mean, we raised tens of millions of dollars for charity, millions of hours of volunteerism, hundreds of millions of petition signatures and phone calls to elected officials.

It was all that early civic technology.

But I have to admit, the internet has also led to, it's technology is always a double-edged sword.

Mm.

It's led to a lot of really negative things as well.

And, and so that's a, that's something we have to grapple with, right?

Hate speech online and the spread of misinformation.

So I'm, I'm very clear-eyed about the, the double-edged sword that is technology.

- All right, let's come back to that.

We are gonna take a short break and when we do come back, we'll continue talking to San Jose mayor and candidate for governor, Matt Mahan.

You're listening to Political Breakdown from KQED news.

Welcome back to Political Breakdown.

I'm Marisa Lagos here with Scott Shafer.

Today we are talking to San Jose mayor, Matt Mahan, who's running for California governor as a Democrat.

Mayor, we were just talking about the kind of, as you called, a double-edged sword of technology.

And you are being backed by some of Silicon Valley's biggest players.

You've seen a lot of donations in recent days and weeks since you got into this race.

I wonder what you see being a pro tech governor means, do you support regulation?

Do you feel like the state has gone too far, not far enough?

How would you bring that into the job?

- Yeah.

Well, I think people are right to be worried about the level of technological change we're seeing, and this is not the first time we've seen this throughout human history, technological change has been really hard on, on people, particularly vulnerable people.

And so we, we have to think about how we can best manage this transition.

I don't believe you can stop it.

I think it would be a mistake to simply try to hit the brakes and say no, and put our head in the sand, because I think it will just be developed elsewhere.

We'll lose all the jobs and all of the ability to regulate and shape it.

But we have to take a balanced approach in San Jose, we've invested in AI upskilling courses for our workforce so that we're not displacing city workers.

We're empowering them to use new tools, evolve how they work, and be more productive, deliver better public services.

We're always going to need humans, but the jobs they do, the tasks they take on will change and they're changing rapidly.

And that, that is concerning.

We have to get ahead of it.

We also, - We're the first.

- You think the state has a role in that?

- Absolutely.

Well, not only did we design from scratch with our public university, San Jose State, AI upskilling courses for our workforce, we also got the three of the leading AI companies to, for the first time ever provide free tools and training.

- But that's not regulation.

- Through, - That's working with tech.

- Well, right.

But I think it's both.

I don't, I don't think the answer to every problem is just regulation.

I also think we need to leverage these tools to re-skill people, train people, create access.

To your point though, regulation is always a, a tool of the state.

And it's an important one.

I, I have, my wife and I are raising little kids.

I don't want them on social media right now.

I don't want them just in front of a chat bot, sort of, you know, at will without any training, without any parental oversight.

So I have, I have concerns about these tools.

I think people are right to worry about the implications for the environment of energy and water use.

But I will say that because of our regulation in California, as long as we, we rightsize it and it's smart and it works in practice, we can ensure that the data centers of the future, the data centers that are the most energy efficient, that use fully clean energy with battery backup, that have the least water loss and are the most water efficient are built because we, our market will demand it.

That's how we've led the way we've led the way through a combination of innovation and smart regulation that works.

Sometimes we get overzealous and we regulate things to death and we get less of what we need.

I think housing is exhibit A there, so we, it's a constant process of having to look at data and learn.

And it's never a binary of tech is good or tech is bad.

I'd also just say on the, on the support from tech, I frankly think it would be a bad sign if the largest employers and the largest source of jobs in our community were not excited about my run for governor.

The reason we're getting tech workers and tech company founders and others to jump on the campaign immediately is they've seen the results we've delivered in San Jose.

We have literally led the state in reducing crime and reducing homelessness.

We've just unblocked thousands of new homes.

I think people want results.

And it isn't just people in tech.

I'm going around the state and I hear from ag from people in Hollywood and every industry that they're getting frustrated with the state that keeps asking for more revenue without actually delivering better outcomes.

- Well, and one of the big controversies now is the so-called billionaire tax, which I think you're against.

- Yeah.

- Hasn't made the ballot yet.

But there was just a report out in Silicon Valley showing that the top 10% of the wealthy hold 75% of the liquid wealth while the bottom half holds less than 1%.

So that wealth divide is huge.

No more, no place more than where you are from.

Yeah.

Is that a problem?

And so if taxes aren't the solution to that or part of the solution, what is?

- Well, taxes may be, I actually sit on the board of the organization that just released - That report.

- Joint Venture Silicon Valley.

- I, I've been involved with Joint Venture and been board chair in the past.

And we do that research for a reason.

We want people to see the trends in our valley so that we can make better public policy.

Taxation is a very important tool for creating opportunity.

But a wealth tax I think is a particularly flawed one.

I've talked about the many other elements of the tax code that could be made fair.

I could give you four or five off the cuff.

I mean, for one, I don't think that billionaires should be allowed to endlessly borrow against their stock and thereby never have to pay capital gains on the stock because they don't sell it.

That's, that's a loophole.

- So you would, - I would absolutely close go to that, that loophole.

I think we can also increase capital gains as capital is more concentrated and AI concentrates wealth and returns to capital are higher than the pay to workers.

I think we need to look at bringing up the capital gains or there are a million ways to use the tax code to level the playing field and invest in our community.

The problem with the wealth tax, and I'm just, this is how I lead, it's why I've sometimes disagreed with the governor.

It's why I'm being very honest on the truth about the wealth tax.

It's been tried.

12 European countries have tried not state or province level, national level wealth taxes.

Nine of them have rolled them back.

A majority have seen an overall decline in the amount of revenue they raise.

And we're already seeing that in California, without even putting it on the ballot.

We have had over a trillion dollars of capital leave the state in the last three months because of the threat of a wealth tax.

We just shrunk our tax base and will now have lower revenue going forward as a result, because we have the most progressive tax code in the country and 40% of our revenue is generated by the top 1% of earners.

It - Is a real, oh, to be fair, as an income tax, not a tax on people's, you know, equity stocks, all those things.

- Well, there are many.

Well, no, it is, and actually our income tax in California also hits when you liquidate stock, when you sell an asset, it actually is a capital gains tax.

So my only complaint with this proposal is that a wealth tax in particular is fundamentally different from other taxes and it has the highest unintended consequences.

It will lead to middle class people having to pay higher taxes in the long run.

So - That, you've talked a lot about sort of special interest and we've been talking about the business community.

I wanna ask you about another huge political force here, which is unions.

They do not see you as an ally.

- It depends on the union.

- Well, we've seen a lot of the unions, I think public employer unions and others kind of speak out against your candidacy.

And I know in 2023, you were the Lone City council member who voted against a 6% raise for city workers that year.

It was overall over the course of the contract, I think about 14.5%.

I just wanna know, you know this, most of the state workforce is unionized.

It is a huge part of the governor's job is, you know, those labor negotiations dealing with folks in those unions.

When you look at a vote like that, like how should we think about the way you're going to approach labor as governor?

- My dad was in a labor union for nearly 30 years.

That's why we had healthcare.

When I had serious health complications in high school, it was thanks to my dad's union job that I got the care I needed without us losing our house, frankly, because of the cost of it.

So I understand the role, the important role unions play in fighting for working people and ensuring fair wages and benefits as elected officials.

We have a responsibility to govern in the interest of the entire community and think about the long-term sustainability and trade-offs we sign up for.

When that contract came up a few years ago, I made very clear, based on all of the best data, we had our budget projections that we could afford to give a 12% raise over three years.

And that if we did any more than that, we would likely create deficits that would force layoffs and service cuts for our community, which I don't think is a responsible thing for us to do.

Over my warning, our council, under an incredible amount of pressure from some of our unions, gave a 14.5% raise over three years.

We now have the exact projected budget deficit that was predicted this year.

We will be cutting services, we will be laying off unionized workers as a result.

And it was avoidable.

And I, I don't like that I was vindicated in this decision, but when you ask what it means for my governing style, labor will always have a seat at the table.

I always want to hear what our workforce needs to be successful, how we can empower them and support them.

But when it comes to fiscal decisions, I will always be honest with people about the implications.

And we absolutely should have given a substantial raise.

That's why I said let's go to 12%.

Going beyond that was irresponsible.

We are now sadly going to pay the price.

Some of our workers, our youngest workers will pay the price, but our residents will also have lower services.

And frankly, this has been an unfortunate story in California politics, as we see over a trillion dollars of unfunded pension liabilities where politicians didn't do their jobs.

Unions have a job to fight for their workers and fight for more pay and benefits.

Elected officials have a responsibility to balance that power against the broader needs of the community.

And I think we've often failed to do that.

- So are you saying that unions have too much power in Sacramento and elsewhere?

Or that politicians don't have enough backbone?

Or both?

- I, I don't think you can make the generalization quite that broad.

I, I think that there are highly organized interests that include unions.

Some more powerful than others include business associations and corporate interests include our friends, the trial lawyers, and many other groups that really have outsized influence in Sacramento because they have professional lobbying teams who are drafting legislation, keeping an eye every day on a, on elected officials recommending staff members for them to hire.

Sacramento's become a very insular place dominated by the highly organized interests, which means frankly, we just don't always get the outcomes our community deserves because the average resident of California and the average taxpayer doesn't have a lobbyist up in Sacramento.

And I guess my independent streak comes from my parents from how I grew up, from a belief that we have to be honest with people and I really deeply believe in the civic process.

And I am concerned that special interests have captured Sacramento and driven a lot of cost and bad policy decisions that aren't serving our residents.

- So it seems like undergirding like your vote, you know, on the contract we talked about and your approach to this is fiscal responsibility.

And I know one of the big focuses that you've had is ending unsheltered homelessness in San Jose.

- Yeah.

- One of the ways you did that was by shifting a lot of money from long-term housing into more short-term things like tiny homes.

And you guys have had a lot of success.

But as our colleague, Guy Marzorati recently pointed out in a story long-term, the Tiny Homes Project is not like fully funded.

Over time, there's going to be a bill that comes due and San Jose, I think has not fully figured out how to pay that.

I wonder, like talk about what you think being governor could do for cities and counties like that and why move forward with a project if you don't have that long-term funding stream?

- Yeah, I, I love Guy.

I think he's a great reporter.

I, I do think his analysis was not totally complete in the sense that there are certain assumptions we've made in our budgeting that indicates differently.

Right now we're rebidding all of our service contracts with a target of reducing annual operating costs by 20%.

We have a new partnership with the county where they're looking to take over the operations of two of our sites, which would bring down our annual operating costs dramatically.

They're also bringing case management and behavioral health teams on.

- But those are changes that would have to happen to not, these - Are all changes that are in progress now and were baked into the commitments we made in the last two budgets as we chose to scale this up.

The reality is we went to the voters and asked for new revenue.

I talked about asking government to, to do better, right?

We went to the voters about six years ago and said, we, we want measure, Measure E, a transfer tax.

That measure generates between 50 and $100 million a year.

And we sold it to voters as a solution to homelessness first and foremost.

And we weren't spending the money in a very scalable or effective way.

When we shifted to things that work, like interim housing, better outreach prevention, we led the state in reducing unsheltered homelessness.

We have a third fewer people living outside today than we did just a few years ago.

We have literally led the state in bringing down the number of human beings living and dying on our streets, which we ought to be celebrating and learning from.

With the reforms that we're making and what we have projected, we will have a system that is actually right sized to cost less than the revenue from Measure E. And so we decided not to build the system any further than we did because we wanted to be fiscally responsible and ensure that our Measure E dollars would be able to cover the cost of the system for years to come.

And we're confident that'll still be the case.

- Is that something, sorry, go ahead.

I just wonder like, is that, can you bring that statewide?

- Absolutely.

In fact, I think the state should restore HAP at a minimum of a billion dollars a year.

- This is a funding source for this - Type of, this is housing.

Yes.

Thank you.

Sorry for using the acronym.

This state needs to have skin in the game and be consistent.

One of the worst things they've done is go back and forth on the level of spending, which makes it hard for cities and counties to know what they can expect.

I would, as governor, insist on a statewide framework that holds every city accountable for building shelter, interim housing, affordable housing, investing in prevention.

And every county must be accountable for building inpatient treatment for addiction and mental health issues.

And they have to have enough capacity to be able to get people in off the streets.

The state should be providing capacity tracking performance.

We should be rewarding and paying the nonprofits that deliver the best outcomes at the lowest cost.

There's a way to do this, but it takes coordination from the state level.

- We're almost outta time, but we've been asking all the candidates for governor the same question at the end, which is, where do you take an out of state friend to give them a taste of California?

And don't say like, you know, your wife's cooking or something like that.

But Sarah said that, no offense to my wife, it - Would be my cooking to be.

I see.

That's okay.

Okay.

You know, I love our access to open space.

We take friends on hikes.

We've got a county park near our house called Quicksilver, where the old mines were.

And it's just a great, if you get high enough up into the mountains, you can actually see the ocean, the Pacific out at one end over Mount Umunhum.

So I just love going up into the mountains and hiking with, with our family and out of town guests.

- What about food?

- Yeah.

What do, what would you cook for them?

- Oh, I cook anything.

I, I love, I love Italian, Mexican food.

I've started to experiment with, with some Asian cuisine.

I mean, I really, I love food, so yeah.

- You guys have some of the best Vietnamese - Food in San Jose.

Jose.

We do, come have a bowl of Pho absolutely.

- Or those banh mi we had last time.

Well, Matt Mahan, thank you so much for coming in and, and discussing all of this with us.

- Thanks for having me.

Appreciate it.

- A note before we go, you're gonna be able to find all of these interviews for governor and our podcast feed in the coming weeks.

You can also watch them on the KQED News YouTube channel, where, where we'll be posting a lot more content this year in general.

For now, that's gonna be a wrap for Thursday, March 5th.

Political Breakdown is a production of KQED.

- Our engineer today is Jim Bennett.

Our producer is Izzy Bloom.

Our video team includes Matt Morales, Alex Tran and Vivian Morales.

I'm Scott Shafer.

- And I'm Marisa Lagos.

We'll see you next time.