Gavin Newsom warns Trump over federal grant cuts: Will California stop sending $80 billion in federal taxes- California Governor Gavin Newsom is pushing back hard against President Donald Trump’s reported efforts to cancel federal grants for California. In a bold move on May 24, 2025, Newsom suggested that California might stop sending billions in federal tax dollars if Trump follows through with the cuts.
Posting on social media platform X (formerly Twitter), Newsom warned:
“Californians pay the bills for the federal government. We pay over $80 BILLION more in taxes than we get back. Maybe it’s time to cut that off.” According to a 2024 Axios report, California is one of only 13 U.S. states that contribute more to the federal government than they receive. The state sends roughly $83 billion more than it gets back in federal spending — a massive sum that could become a key pressure point in the ongoing standoff.
Why is Trump threatening to cut California’s federal grants?
Federal agencies are reportedly reviewing which specific grants could be revoked under President Trump’s orders. This comes amid growing tensions over California’s policies, especially its protections for transgender athletes in public school sports.
The Department of Justice recently warned California public schools that they could face legal action if they continue allowing transgender students to compete in line with their gender identity — a direct conflict with Trump’s February 2025 executive order that bans “male participation in women’s sports.”
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That policy states that federal funds will be rescinded from educational institutions that “deprive women and girls of fair athletic opportunities.” The directive targets states like California, where a 2013 state law requires school sports participation to match students’ gender identity.
What triggered this new federal–state clash?
The renewed clash escalated after 16-year-old AB Hernandez, a transgender girl and junior at Jurupa Valley High School, won the girls’ long jump and triple jump events at the CIF Southern Section Masters meet on May 24, securing a place in the California state track and field championships. Hernandez went on to win two gold medals and one silver at the state finals held from May 30 to 31 — drawing national attention, praise from LGBTQ+ advocates, and harsh criticism from Trump, who claimed this undermined fairness in women’s sports.
Can California really withhold $80 billion in federal tax contributions?
Technically, states don’t have the power to directly withhold federal tax dollars. However, Newsom’s post signals a serious political warning. California, now the world’s fourth-largest economy, plays a central role in the national economy. A breakdown in cooperation between federal and state governments over tax contributions or grant funding could have far-reaching consequences.
California’s population of nearly 40 million includes one of the highest concentrations of tax contributors in the nation. If the standoff worsens, it could impact everything from transportation grants to education and disaster-relief funding.
Are other California leaders supporting Newsom’s position?
Yes. Representative Laura Friedman, who serves California’s 30th Congressional District, said: “This is political extortion — plain and simple. Californians pay $83 billion more in taxes than we receive from the federal government every year. America relies on our tax dollars — and now Trump wants to punish us for it.” Lawmakers argue that Trump’s moves are less about policy and more about punishing political opposition, especially in Democratic-led states like California.
How many transgender student-athletes are at the center of this dispute?
Governor Newsom’s office says California’s K-12 public school system serves about 5.8 million students, but the number of active transgender student-athletes is estimated to be in the single digits.
Despite the small number, any federal funding cuts would ripple across the entire education system, affecting millions of students, educators, and public institutions statewide.
What happens next in the California vs. Trump showdown?
Legal battles seem likely. California has not backed down, and Newsom appears ready to fight both legally and politically. If Trump’s administration rescinds grants — and California escalates by challenging federal tax processes — a new chapter in the federal-versus-state power struggle could unfold.
For now, California’s leaders remain defiant, signaling they won’t accept what they see as political retaliation. With billions of tax dollars and critical grants at stake, this high-stakes standoff is far from over.
FAQs:
Q1: Why did Gavin Newsom warn Trump about federal taxes?
Newsom warned Trump after reports of federal grant cuts, saying California pays $83 billion more than it gets.
Q2: What sparked the Trump-California conflict over transgender athletes?
Trump opposed California’s policy after a transgender teen won girls’ track events, citing unfair sports participation.