San Jose Mayor Matt Mahan: California's Business Policies 'Shooting Ourselves in the Foot'

San Jose Mayor Matt Mahan has publicly criticized California's broader economic policies, asserting that the state is "shooting ourselves in the foot" regarding its business environment. In a recent social media post, Mayor Mahan highlighted San Jose's commitment to fostering employer success and expressed hope that other parts of the state would adopt similar pro-business approaches. He also called upon gubernatorial candidates to address these critical issues, signaling a growing concern from local leaders about the state's economic direction.

Mayor Mahan, who took office in 2023 with a platform focused on accountability and "back to basics," emphasized San Jose's efforts to simplify operations for businesses. His administration has prioritized tackling homelessness, reducing crime, and cleaning city streets, aiming to create a more favorable environment for companies. The city's recently approved FY2025-26 budget, for instance, addressed a significant deficit without major layoffs, and Mahan has notably reallocated a substantial portion of Measure E funds towards interim homelessness solutions.

California frequently faces criticism for its high cost of living, stringent regulations, and elevated tax burdens, factors that contribute to its consistent low ranking in national business climate surveys. For the past decade, Chief Executive magazine has ranked California as the worst state for business. These challenges have reportedly led over 500 companies to either relocate or expand outside the state since 2020.

The state's regulatory landscape includes contentious legislation like the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261), which mandate extensive greenhouse gas emission and climate risk disclosures for large companies. While these laws are currently proceeding despite legal challenges, many businesses view them as burdensome. Additionally, labor laws such as Assembly Bill 5 (AB 5) and the Private Attorneys General Act (PAGA) have drawn criticism for increasing operational complexities and legal risks for employers.

Despite these perceived hurdles, California maintains the world's fourth-largest economy, driven by strong productivity and a deep talent pool, particularly in technology and innovation. However, Mayor Mahan's direct appeal to future gubernatorial candidates underscores the urgency for state-level leadership to address the concerns of the business community. The upcoming election cycle is expected to bring these economic and regulatory debates to the forefront, as candidates outline their strategies for California's long-term prosperity.