California gets less federal money than it pays in taxes
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California is one of only 13 U.S. states that sends more money to the federal government than it receives, a recent analysis found.
Why it matters: As President Trump pushes for states to become more financially independent, the Golden State is one of the least reliant on the federal government.
By the numbers: California had the fourth lowest balance of federal spending per capita in 2022 when discounting COVID relief spending at -$3,239, according to a 2024 Rockefeller Institute of Government report.
- Only Massachusetts (-$4,846), New Jersey (-$4,344) and Washington (-$3,494) were lower.
- New Mexico ($14,781), Maryland ($12,265) and Virginia ($11,577) had the highest.
- The U.S. average is $3,029.
How it works: Each state's balance of payments reflect how much federal money is distributed there (in the form of programs like Medicaid/Medi-Cal and SNAP, for example) versus how much money residents and businesses send to the federal government in taxes.
- A negative figure means a state sends more to the federal government than it receives, while a positive figure means it gets more than it gives.
Between the lines: "States with large defense-contracting sectors and more military bases receive more federal defense spending, while federal wages are disproportionately concentrated within states with a large federal employee presence," the report notes.
- That at least partially explains the results in states like Virginia and Maryland, which are both relatively high income but have lots of federal workers, contractors and agency offices thanks to their proximity to Washington, D.C.
What we're watching: How President Trump's quest to trim federal spending actually plays out at the state level could shake up these figures in unpredictable ways.
- More than one-third of California's budget comes from federal funds, and hundreds of millions of dollars for medical and health research across the state could be at risk with federal cuts.