The Trump administration and the state of California are locked in another dispute, with both sides threatening each other financially. The latest funding threats come as the two sides are on a collision course over state and federal policies.
Education Secretary Linda McMahon said in a June 10 interview with Bloomberg News that California is in violation of federal Title IX protections. The statement follows a transgender athlete’s recent win of two state titles in a California high school girls’ track and field competition.
“We have men participating in women’s sports, which is clearly against Title IX, and the president has made it very clear that he is going to uphold Title IX,” McMahon said. “When we’re seeing violations, we want to make sure we’re addressing them because if we don’t address them as they occur then it’s sort of by acquiescence that it’s okay to continue, and it’s not.”
The California Interscholastic Federation later changed its rules, allowing competitors who were born female to qualify in certain competitions if losing to a trans athlete means disqualification.
California receives $8 billion in federal education funding
McMahon suggested that one possible consequence for California’s alleged noncompliance would be revoking federal education funding. California receives nearly $8 billion annually from the U.S. Department of Education.
While it remains unclear which specific programs or amounts are under review, McMahon warned that federal funding is at risk under current circumstances.
“That is one of the tools and the opportunities that we have with California,” McMahon said. “I think it’s right that we make them aware that that is a risk that they run.”
Newsom issues threat in response
In response to the administration’s reported plans, Newsom issued a pointed warning of his own, suggesting that California may consider withholding federal tax payments.
“Californians pay the bills for the federal government,” Newsom wrote in a post on X. “We pay over $80 BILLION more in taxes than we get back. Maybe it’s time to cut that off.”
California Assembly Speaker Robert Rivas backed Newsom’s idea that the state shouldn’t be pushed into the policies of the administration at the threat of losing state funding, when the Golden State accounts for an outsized portion of federal revenue.
“This is unconstitutional and vindictive,” Rivas said in a June 6 BlueSky post. “We’re the nation’s economic engine and the largest donor state, and deserve our fair share. I’ll use every legal and constitutional tool available to defend CA — we must look at every option, including withholding federal taxes.”
California residents and businesses contribute $83 billion more than the state receives in federal spending, according to the California Budget and Policy Center.
Treasury Secretary Scott Bessent fired back on social media, accusing the governor of promoting tax evasion. “Governor @GavinNewsom is threatening to commit criminal tax evasion,” Bessent posted on X. He added that the governor’s remarks were “extremely reckless.”
As of publication, the funding threats remain rhetorical, but they reflect the deepening divide between the federal administration and California’s leadership.
Trump admin weighs broader funding cuts
According to CNN, the Trump administration is preparing for a large-scale cancellation of California’s federal funding. Federal agencies have reportedly been directed to begin identifying grants that could be withheld, particularly those tied to the University of California and California State University systems.
