In recent years, California has received more federal funding than any other state, with federal funds accounting for 33.9% of the state’s budget in the 2024-25 fiscal year, totaling $152.8 billion. Despite this, California still faces funding shortages. Governor Gavin Newsom recently went to Washington D.C. to request more funding from the Biden administration.
According to data from the California Budget and Policy Center, of the $152.8 billion in federal funds received by California, 75% ($114.6 billion) is allocated to support health and human services projects, with the remaining $32.8 billion mostly allocated to other essential projects involving labor and workforce development, K-12 education, higher education, and transportation.
The California Legislative Analyst’s Office predicted last week that California may face a $20 billion deficit in the 2025-26 fiscal year, with expenditure growth rates for the next four fiscal years reaching 5.8%, higher than the income growth rate of 4%. Recent ballot measures passed in California, including a $10 billion education bond and a $10 billion park, environmental, energy, and water bond, have brought new costs. Additionally, there are commitments to provide tax breaks to Hollywood, government litigation preparation for policy changes following President Trump’s election, and potential disaster relief funds.
Governor Newsom announced on Monday, November 25th, that if President Trump cancels federal zero-emission vehicle tax credits, he will recommend California create a new version of clean vehicle rebate program. California also requests state funding for issues related to illegal immigrants and abortions. During President Trump’s first term, California filed over 100 lawsuits against the Trump administration in areas such as gun control, healthcare, education, and immigration, indicating potential significant future litigation expenses.
According to the “Washington Sentinel,” from March 2021 to December 2024, California received over $43 billion in funding from the Biden administration’s COVID-19 American rescue plan, including $27 billion in state fiscal recovery funds. However, of the $27 billion, only about $1 billion was used to address public health impacts to support vaccine incentives, around $7 billion was allocated to compensate for the economic impacts on families and businesses due to the pandemic, broadband infrastructure projects received $2.4 billion, with the remaining approximately $16.7 billion (about 62%) used to offset California’s revenue shortfall.
The Public Policy Institute of California (PPIC) stated that increased state government spending and one-time federal pandemic funding have raised K-12 education funding levels to historical highs. In the 2022-23 academic year, state, local, and federal funds for California public schools were approximately $125 billion, increasing to $131 billion in the 2023-24 fiscal year, an increase of $60 billion. State government funds now contribute over 60%, compared to 55%-60% before the pandemic.
Federal government provided California with a one-time $31 billion for the COVID-19 pandemic, accounting for 23% of California’s K-12 funding in the 2020-21 academic year and 11% in the 2021-22 academic year. These one-time funds must be spent by the fall of 2024. In most non-recession years before the outbreak, federal funding only accounted for 6%-9%.
Apart from the K-12 system, California’s top colleges and universities also rely on federal funds for research projects and providing economic support to students, with the University of California (UC) receiving nearly $16 billion in aid in the 2022-23 fiscal year.
On November 15th, Governor Newsom announced that five communities recovering from the devastating wildfires in 2018 will receive over $40 million in additional federal disaster recovery funds. Counties receiving funds include Butte, Lake, Los Angeles, Shasta, and Ventura. Paradise town in Butte County will receive nearly $17.9 million to build the “Paradise RISE – Paradise Recovery Infrastructure and Sustainable Education Center” for Paradise High School; Lake County will receive over $4.7 million to aid in long-term recovery, rebuilding, and resilience to future disasters; Los Angeles County’s organizations “Women in the Trades” and “Women in Nontraditional Employment Roles” received $2 million to provide training and employment opportunities for underserved populations in the construction industry.
Redding City in Shasta County will receive over $8.6 million to initiate its workforce recovery training program, providing online, remote, virtual, and face-to-face training for 200 residents. Ventura County will receive $7.5 million to fund training for 215 residents in the healthcare field, restore healthcare infrastructure, and enhance disaster preparedness.
Previously, California had received over $139 billion in federal funds to address wildfires, hurricanes, and other disasters occurring between 2017 and 2019. The Federal Emergency Management Agency (FEMA) disaster relief funds and Small Business Administration (SBA) disaster loans also provided $20.5 billion to California. In the 2021 fiscal year, California received 13% of the federal aid distributed by the United States, originating from 27 different federal agencies, with over $109 billion in assistance mainly from the Department of Health and Human Services.
As a sanctuary state, California has also received millions of dollars in FEMA funds to provide services to illegal immigrants. According to the “Center Square” report, FEMA has spent $159 million in individual assistance since 2023.