The growing tension between California and the federal government has reached fever pitch, with Governor Gavin Newsom going on record to say he’s even considering withholding tax payments from the state.
President Trump is reportedly weighing “large-scale” funding cancellations in California. According to POLITICO, the Trump administration isn’t acting in a vacuum — it’s using federal funding as a leveraging tactic. We’ve already seen this tactic in play with how Trump treated PBS and Harvard University.
But now, Trump has expanded the scope. There’s talk of a potential full termination of federal grants to all universities in California. Research funding, student aid — all of it could be affected by this latest move. And this isn’t out of the blue. Trump is reportedly using the potential cuts to pressure the state over laws — particularly those regarding trans athletes. But Newsom isn’t rolling over. In fact, he issued a biting response.
He took to Trump’s frenemy’s site, X, and gave Trump yet another thing to worry about. Newsom suggested that California could withhold tens of billions of dollars in taxes. The governor cited research from the Rockefeller Institute, which shows that California pays far more in federal taxes than it gets back — what’s formally called a “donor state.” Reportedly, in 2022, California paid $83 billion more to the federal government than it got in return. On X, Newsom boldly suggested, “maybe it’s time we cut that off.”
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, @realDonaldTrump. pic.twitter.com/lwFHFSgSyJ
— Gavin Newsom (@GavinNewsom) June 6, 2025
Federal taxes are mostly collected through the IRS from individuals and corporations — they don’t simply flow from the state in a way that Newsom could just cut off directly, as he made it seem. So this should probably be read as Newsom making a strong political statement. He’s been very clear about his intent to stand up to an increasingly chaotic president. This is, above all else, about the message.
The White House apparently heard the threat. When asked about Newsom’s comments and the plan to cut off funding to California, officials said that no final decisions had been made. However, the White House did take the opportunity to criticize the state’s policies — calling them anti-energy, pro-sanctuary, soft on crime, and pro–child mutilation. They labeled California a “nightmare” and reiterated their goal of forcing the state to realize the “Californian dream.”
Gavin Newsom’s name has been floated as a presidential hopeful. This show of strength — standing up to MAGA and forcing a retreat — could certainly bolster his national appeal. Still, it’s worth noting that Newsom has been pragmatic in his dealings with the Trump administration. While the public may focus on the sparring and theater, behind the scenes it’s a different story. Newsom has reached out to the White House during crises — including the LA fires — and has actively worked with them to help maintain Hollywood as the epicenter of the film industry.
They clash over policies, disagree on tariffs, cooperate during disasters, and negotiate when industry support is on the line. It’s messy — but also, politics as usual. Newsom may not be perfect, but he’s showing Democrats a strong and strategic approach to dealing with Trump.
