California Governor Gavin Newsom at the Vogue World: Hollywood Announcement at Chateau Marmont on March 26, 2025 in West Hollywood, California. (Photo by Michael Buckner/Variety via Getty Images)
Sacramento, California – California Governor Gavin Newsom on Friday floated a dramatic response to looming federal budget threats from the Trump administration: the state could consider withholding tens of billions of dollars in federal taxes.
The comment, posted to Newsom’s official X account, came hours after CNN reported that former President Donald Trump, who is widely expected to secure the GOP nomination, is considering slashing federal grant funding to California, including a possible “full termination” of financial support for the University of California and California State University systems.
“Californians pay the bills for the federal government,” Newsom wrote, citing an analysis from the Rockefeller Institute showing that in 2022 the state paid roughly $83 billion more in federal taxes than it received in spending. “Maybe it’s time to cut that off.”
The White House sought to downplay the CNN report, but did not deny it outright. Spokesperson Kush Desai accused California of embracing “lunatic anti-energy, soft-on-crime, pro-child mutilation, and pro-sanctuary policies” in a statement Friday. “The Trump administration is committed to ending this nightmare and restoring the California Dream,” he said, adding that no final decisions had been made.
Still, the possibility of punitive cuts has jolted California’s leadership, prompting a wave of defiance from Sacramento. Assembly Speaker Robert Rivas echoed Newsom’s comments Friday, writing on the social platform Bluesky that the rumored grant cancellations were “unconstitutional and vindictive.”
“We’re the nation’s economic engine and the largest donor state,” Rivas said. “I’ll use every legal and constitutional tool available to defend CA — we must look at every option, including withholding federal taxes.”
State Senate Pro Tem Mike McGuire also vowed resistance, condemning what he called “this President’s illegal and unprecedented attack on our state,” though he stopped short of backing a tax revolt.
The tension reflects a renewed battle over federalism that has marked much of Trump’s political relationship with California. The president has previously used funding threats to influence state policies, including immigration enforcement and, more recently, LGBTQ+ inclusion in youth sports.
Despite Newsom’s combative tone, he has continued to petition the White House for assistance — requesting federal relief for wildfire damages and discussing strategies to boost California’s film industry.
The idea of withholding federal taxes is not new. In 2017, then-Senate President Kevin de León proposed a workaround for Californians hit by Trump’s tax reforms. And just this week, two Democratic mayoral candidates in New York raised a similar proposal in response to federal overreach.
With more than $80 billion at stake, California’s latest tax rebellion may test the limits of state resistance — and the balance of power between Sacramento and Washington.
