Donald Trump threatened to cut federal spending in California. So why has it gone up?
Since President Donald Trump took office, California — the state he has threatened to “defund” — has ceased to become a “donor state” that pays more in taxes than it gets back in federal dollars.
The big reason: A boom in federal spending in California.
In the Trump years, California has gone from being the nation’s third biggest “donor state” in the 2015 fiscal year to a state where federal taxes and spending were about even three years later, according to an analysis by the nonpartisan Rockefeller Institute of Government in Albany, New York.
Yet two and a half weeks after Trump took office in 2017, angry that California could provide protection for certain undocumented immigrants, he threatened to pull federal money from the state.
“If they’re going to have sanctuary cities we may have to do that (cut federal funding). Certainly that would be a weapon,” he told Fox News.
State-based payments to the government, notably income and Social Security taxes, have not changed much, particularly as broad tax cuts were enacted in December 2017. The government spending is the reason for the change in the state’s status.
In the 2015 fiscal year, California sent $28.8 billion more to Washington than it got back, trailing only New York and New Jersey as donor states, according to the Rockefeller Center study.
The following fiscal year, California sent $312 million more than it got, dropping to ninth biggest donor state.
Trump, who lost the state by 30 percentage points to Democrat Hillary Clinton, was quick to blast California shortly after taking office. In a Fox News interview two weeks after taking office, he branded the state “out of control”
He was critical of the possibility that California could become a “sanctuary state” for undocumented immigrants.
“If we have to, we’ll defund,” he told Fox. “We give tremendous amounts of money to California.”
“I don’t want to defund the state or city, I don’t want to defund anybody, I want to give them the money they need to properly operate a city or a state,” Trump said.
But, Trump added, “if they’re going to have sanctuary cities we may have to do that – certainly that would be a weapon.”
Instead, California has seen a surge in federal spending and climbed out of donor state status. It got $1.5 billion more than it paid in fiscal 2017, President Barack Obama’s last budget. The next year, the positive balance was $1.9 billion.
There’s no one single reason for the change.
“California is doing extremely well, but it also has massive pockets of poverty,” said Wesley Hussey, professor of political science at California State University, Sacramento, explaining why social service and health care payments may have gone up.
Another reason for the spending increase: “Some states have benefited from an increase in contract spending, and California is one of them,” said Michelle Cummings, fiscal policy analyst at the Rockefeller Institute.
Spending has been booming, according to USAspending.gov, the federal government spending database.
Per capita federal awards in California have jumped from $6,492 in fiscal 2015 and $7,124 in 2016 to $7,771 in fiscal 2017, part of Trump’s first year. In 2018 the number climbed to $7,881 and was $7,898 last year.
McKesson Corp., which provides health care services, got a $2.85 billion contract in 2014, the third highest in the state. Last year, it topped the state list of federal awards with a $5.71 billion contract. McKesson could not be reached for comment.
Next on the 2019 list was California Institute of Technology with a $3.84 billion contract, followed by Health Net Federal Services, which provides managed health care programs and behavioral health services to public sector employees and beneficiaries.
It has many contracts with federal and state agencies. It serves beneficiaries as the TRICARE West Region managed care support contractor in support of the Department of Defense’s TRICARE health care program. And it’s one of three contractors it supports the General Services Administration’s Military & Family Life Counseling program.
Meanwhile, the war between Trump and California continues to rage. Last fall, the president said Gov. Gavin Newsom “had done a terrible job of forest management” in trying to control the big Kincade Fire that erupted in October.
In his State of the Union address last week, Trump singled out California for passing “an outrageous law declaring their whole state to be a sanctuary for criminal illegal immigrants — with catastrophic results.”
The law, passed in 2017, blocks local law enforcement officials from targeting people based entirely on their immigration status. It also restricts what they can tell immigration officials about people in their custody.
Newsom has been firing back. Monday, he told ABC’s “The View” Calilfornia was the nation’s “most un-Trump state” and that “Trump is scared of California.”
This much is clear, said Hussey: “There’s no easy way a president can start removing massive funding from a state.”
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