Since January 2025, the Trump administration’s funding freeze on California has touched nearly every major area of the state budget, from K–12 education and Medi-Cal to FEMA disaster aid, university research, flood control, and high-speed rail. California relies on federal dollars for about 35 percent of its state budget — roughly $175 billion in 2025–26 — and Attorney General Rob Bonta reports the state has responded with 37 lawsuits as of August 2025, winning early relief in 17 of 19 rulings and preserving at least $168 billion in federal funding through the courts.1Office of the Governor of California. Fighting Federal Government Pays Off — California’s Legal Challenges Have Restored at Least $168 Billion in Federal Funding2California Attorney General. Six Months of the Second Trump Administration — Attorney General Bonta Reports
The Order That Started It
In late January 2025, the Office of Management and Budget directed federal agencies to freeze nearly $3 trillion in funding nationwide. California joined a multistate suit in the U.S. District Court for the District of Rhode Island. Chief Judge John J. McConnell Jr. found the executive branch had no “constitutional or statutory authority” to impose a categorical freeze on appropriated and obligated funds, and issued a preliminary injunction. The First Circuit denied the administration’s request for an emergency stay.3New York State Attorney General. State of New York v. Donald Trump — Preliminary Injunction4ABC News. Trump Reignites Legal Fight Freezing Billions in Federal Funding California credits this single case with preserving roughly a third of its budget.
The OMB order set the pattern for what followed: broad freezes announced quickly, state lawsuits, and injunctions that either restored money or bought time while narrower fights continued agency by agency.
Education
The $811 Million K–12 Grant Freeze
On June 30, 2025, one day before scheduled release, the U.S. Department of Education notified states in an 84-word email that $6.2 billion in congressionally appropriated grants would be withheld because they were not “in accordance with the President’s priorities.”5EdSource. California Education Federal Funding Cuts California’s share was about $811 million.6CalMatters. Education Funding California
Frozen programs included teacher training, English language acquisition ($158 million in California), migrant education ($121 million in California), 21st Century Community Learning Centers after-school programs, and student enrichment funding. Roughly 10,000 after-school programs serving 1.4 million students were at risk. Los Angeles Unified faced a $110 million shortfall; Oakland Unified faced a $30 million gap. State Superintendent Tony Thurmond called the move an “illegal impoundment of federal education dollars.”
On July 18, 2025, the White House released $1.3 billion of the frozen funds nationally, including $158 million earmarked for California. The rest stayed in limbo, and the administration’s proposed 2026 budget seeks to eliminate several of the affected programs outright or convert them to block grants.5EdSource. California Education Federal Funding Cuts
UCLA, UC Research, and the $1.2 Billion Fine
In summer 2025, federal agencies froze over $300 million in research funding for UCLA — about $240 million from NIH, $81 million from NSF, and $18 million from the Energy Department — as part of an antisemitism task force investigation. Agencies cited “illegal affirmative action” policies, failure to combat antisemitism, and transgender athlete participation.7The New York Times. Trump Cuts UCLA Funding Federal Research The administration demanded UCLA pay a $1.2 billion fine to restore the money and keep future eligibility. UC President James B. Milliken said the fine would “devastate” the UC system.8CNN. Trump Colleges California Funding
On November 14, 2025, U.S. District Judge Rita Lin issued a preliminary injunction blocking immediate cuts or fines, finding the administration’s actions “coercive and retaliatory” and citing a “concerted campaign to purge ‘woke,’ ‘left,’ and ‘socialist’ viewpoints” from universities in violation of the First and Tenth Amendments.9NPR. UC University California Discrimination Fine Ruling UC and the administration remained in settlement talks through at least mid-2026.
The $4.9 Billion Threat Over AB 1955
In January 2026, Education Secretary Linda McMahon said California had “egregiously abused” its authority by enforcing AB 1955, the state law barring school districts from requiring staff to disclose a student’s gender identity to parents. The administration threatened to withhold $4.9 billion in annual federal education funding.10Politico. Bonta Sues to Block Trump Funding Threat Over Student Forced Outing Law
Attorney General Bonta filed suit on February 11, 2026, in the Northern District of California, arguing the administration cannot impose new conditions on already-appropriated funds. As of early 2026, no hearing date had been set, and the money had not been formally withheld.11EdSource. California Challenges Trump Administration’s Threat to Withhold $5 Billion Over Gender Identity Disclosure
Special Education Grants
The Department of Education also discontinued State Personnel Development Grants supporting special education teacher training. California, Rhode Island, and Wisconsin sued in the Northern District of California on June 9, 2026. California had been slated to receive $2.1 million per year for five years. The department said it retained authority to evaluate grants on performance metrics.12Courthouse News Service. California, Rhode Island, and Wisconsin Sue Trump Administration Over Cuts to Special Education Grants
Health Care and Social Services
$5 Billion in Child Care and Family Assistance
On January 6, 2026, the Administration for Children and Families notified five Democratic-led states — California, Colorado, Illinois, Minnesota, and New York — of a freeze on up to $10 billion in child care and social services funding, citing “massive amounts of fraud.” California’s share totaled about $5 billion: $1.1 billion from the Child Care and Development Fund (176,300 children monthly), $3.7 billion from Temporary Assistance for Needy Families (350,000 CalWORKs families), and $190 million from the Social Services Block Grant (daycare for 1.1 million children and services for 380,000 people with disabilities).13U.S. Senator Alex Padilla. Padilla, Schiff Demand Trump Administration Reverse Funding Freeze on California’s Critical Child Care, Family Assistance Grant Programs
The five states filed a joint lawsuit. A federal judge issued a temporary restraining order and extended it on January 23, 2026. Senators Padilla and Adam Schiff called the fraud allegations a “pretext for political retribution” and noted the administration had produced no evidence.14U.S. Senator Adam Schiff. Sens. Schiff and Padilla Demand Trump Administration Reverse Funding Freeze on California’s Critical Child Care, Family Assistance Grant Programs
$600 Million in CDC Public Health Grants
In February 2026, HHS notified Congress it would terminate CDC grants in California, Colorado, Illinois, and Minnesota totaling more than $600 million. California’s share was the largest. The Public Health Infrastructure Grant alone represented $180 million in California funding, $130 million still outstanding, supporting over 400 jobs, electronic laboratory systems, and dental care for underserved children. Smaller targeted terminations affected LA County health equity work ($6 million), an HIV surveillance project ($1.1 million), and an LGBTQ health research center at UCSF.15CalMatters. $600 Million Public Health Trump Bonta Lawsuit
Bonta co-led a four-state suit filed February 11, 2026, in the Northern District of Illinois, alleging the cuts came from a “Targeting Directive” out of OMB. An HHS spokesperson said the grants “do not reflect agency priorities.” By March 2026, the attorney general secured a second court order blocking the terminations.16California Attorney General. Attorney General Bonta Sues Trump Administration to Protect Over $600 Million in Health Grants17California Attorney General. Federal Accountability
The $1.3 Billion IHSS Medicaid Deferral
In May 2026, the administration deferred $1.3 billion in Medicaid payments for California’s In-Home Supportive Services program, which serves about 900,000 patients, and withheld $200 million in separate administrative claims. CMS Administrator Dr. Mehmet Oz called it the “largest deferral we’ve ever made” and cited California home health spending growing at twice the national average. Vice President JD Vance accused the state of not doing enough to combat Medicaid fraud.18CNN. Medicare Hospice Home Health Enrollments Pause
State Medicaid Director Tyler Sadwith said the growth reflected a 17.5 percent caseload increase between 2023 and 2025 and wage increases for care workers. Governor Newsom noted IHSS costs about $30,000 per person annually, compared with four or five times that for nursing home care. As of mid-2026 the deferral remained in effect, with no California-specific lawsuit publicly filed.19CalMatters. Trump Medicaid Fraud Freeze California
H.R. 1 and Longer-Term Medi-Cal Cuts
Separate from the freezes, President Trump signed H.R. 1, the “One Big Beautiful Bill Act,” in July 2025. It includes more than $1 trillion in Medicaid cuts over the coming decade.20California Budget and Policy Center. Federal Funds Drive One-Third of California’s State Budget Starting in 2027, most adults enrolled through the ACA Medicaid expansion must meet an 80-hour-per-month work, education, or community service requirement, and eligibility redeterminations move from annual to every six months.
The California Department of Health Care Services estimates 4.8 million Medi-Cal enrollees will be subject to the new requirements, with 1.1 million projected to lose coverage. Redetermination changes alone are expected to drop 289,000 people by June 2027 and about 400,000 by 2029–30. UC Labor Center projections suggest more than two million additional Californians could lack health insurance by 2030.21California Health Care Foundation. Medi-Cal in the H.R. 1 Era — Resources for the Field
Disaster Relief and Infrastructure
FEMA and Wildfire Recovery
President Trump cast doubt on whether he would approve the $40 billion Governor Newsom requested for wildfire recovery, which included $16.8 billion for FEMA property rebuilding and debris removal. In April 2025, the administration canceled the Building Resilient Infrastructure and Communities (BRIC) program, rescinding more than $880 million nationally, including a $35 million wildfire prevention grant in Napa County.22ProPublica. California Disasters FEMA Trump Funding Fires In August 2025 a federal judge temporarily blocked reallocation of BRIC funds in a 20-state suit, though the ruling did not release the money.23National Association of Counties. Federal Judge Temporarily Halts BRIC Grant Program Termination
The administration also proposed quadrupling the damage threshold for FEMA public assistance, which would push California’s threshold from about $75 million to nearly $300 million per disaster. An Urban Institute analysis found the rule, applied to 2008–2024, would have cost California $2 billion, a 26 percent reduction.
In June 2025, Homeland Security Secretary Kristi Noem imposed a directive requiring her personal approval of all FEMA expenditures over $100,000. By January 2026 the policy had created a $17 billion national backlog, and FEMA barred staff from telling states when reviews would finish.24The New York Times. FEMA Aid Kristi Noem California was waiting on more than $1 billion in wildfire recovery aid as of February 2026 and was reportedly left out of a subsequent $5 billion release.25CNN. Disaster Aid FEMA States Trump Shutdown Noem’s successor Markwayne Mullin rescinded the approval directive on April 1, 2026, with $2.2 billion still in the queue.26NBC News. DHS Markwayne Mullin Approval FEMA Aid Disaster Response
Flood Control Projects
On May 21, 2025, the Army Corps of Engineers work plan zeroed out $126 million for four California flood control projects: the American River Common Features Levee Improvement Project, the Pajaro River Flood Risk Management Project, the Lower San Joaquin River Project, and the West Sacramento Project. The Natomas Basin near Sacramento, described as one of the most flood-vulnerable areas in the country, lost its funding entirely. The administration said it used discretion under a continuing resolution that lacked specific directives.27CNN. Blue State Flood Prevention Cuts28U.S. Senator Alex Padilla. Padilla, Schiff, Murray, Cantwell Call Out Trump’s Outrageous Partisan Decision to Slash Flood Protection Funding for Blue States
High-Speed Rail
In July 2025, the Department of Transportation terminated approximately $4 billion in unspent federal funding for California’s high-speed rail project, citing the state’s inability to meet binding grant obligations and a $7 billion funding gap. Governor Newsom called the termination “illegal.”29U.S. Department of Transportation. Trump’s Transportation Secretary Sean P. Duffy Pulls Plug on $4B California High-Speed Rail California initially sued but dropped the case in late December 2025, with a rail authority spokesperson saying the federal government was “not a reliable, constructive, or trustworthy partner.” The project now leans on private investment and about $1 billion annually from the state’s cap-and-trade program through 2045.30PBS NewsHour. California Drops Lawsuit Seeking to Reinstate Federal Funding for High-Speed Rail Project
Where the Legal Fight Stands
As of August 2025, Bonta reported filing 37 suits against the administration, leading or co-leading 23, along with more than 40 amicus briefs. Of 19 cases with early rulings, California won 17. Thirteen court orders blocking administration actions were in effect.2California Attorney General. Six Months of the Second Trump Administration — Attorney General Bonta Reports
The suits rely on the Impoundment Control Act, which limits executive withholding of appropriated funds; the Administrative Procedure Act, which requires reasoned decision-making; and constitutional theories including the Spending Clause, separation of powers, and the Tenth Amendment’s bar on federal commandeering of state governments. A newer theory is gaining traction: in *City of Saint Paul v. Wright*, decided January 12, 2026, Judge Amit Mehta of the U.S. District Court for the District of Columbia found that the Department of Energy’s termination of $27.6 million in clean energy grants violated the Fifth Amendment’s equal protection guarantee, concluding the “only identifiable difference” between retained and terminated grants was “the grant recipient’s state’s political identity.”31Harvard Law Review. Challenging Politically Discriminatory Funding Cuts The administration frames its actions as combating fraud, aligning spending with presidential priorities, and enforcing federal law on immigration, antisemitism, and civil rights.
What It’s Doing to the State Budget
Through a special session, Newsom secured $50 million (available through June 2028) for the Department of Justice and other agencies to fight federal actions in court and fund legal services for people affected by federal policies.32Legislative Analyst’s Office. Major Impacts of H.R. 1 The state drew $7.1 billion from its Budget Stabilization Account in 2025–26 and borrowed roughly $10 billion to manage a $15 billion deficit.
County governments have asked Sacramento for $6.4 billion over two years to offset an estimated $6 billion to $9.5 billion in federal reductions from H.R. 1, warning the state’s safety net could crumble.33CalMatters. California Budget Red Trump Cuts The Newsom administration, staring at a $21 billion shortfall in the 2026–27 proposed budget, plans a mix of spending reductions, new revenue (including taxes on digital software and limits on business credit use), and larger reserves. Combined state reserves are projected at roughly $29.9 billion in 2026–27, including a $15.1 billion Budget Stabilization Account balance.34California Governor’s Budget Summary. Full Budget Summary New threats continue to emerge and new suits continue to be filed.