Budget and Policy Post
January 18, 2017
Federal Spending in California
How Much Money Does the Federal
Government Spend in California?
In this post, we estimate total federal expenditures in California by major program.
How Federal Expenditures Reach California. As shown in Figure 1, we categorize
federal funding according to the three major channels through which they reach
Californians. These channels are: (1) direct payments to individuals, private entities,
and universities; (2) payments to the state government; and (3) payments to local
governments. Private entities include businesses, healthcare intermediaries, and
nonprofit organizations.
Intermediate Payments Attributed to Their First Recipient. As displayed in the figure,
we categorize federal payments by their first recipient, not their ultimate beneficiary.
This method is consistent throughout the blog series except in Post 5, where we discuss
all federal expenditures received by counties. Federal Medicaid funding for child
welfare services, for example, is distributed from the federal government, to the state,
and then to counties for the provision of services. Similarly, most federal funding for
the Supplemental Nutrition Assistance Program (SNAP) flows from the state to grocers
(which we define as private entities). The state also distributes most federal funds for
education to school districts and local education agencies. However, despite these
ultimate beneficiaries, we categorize all federal payments that are first distributed to
the state as “payments to the state government.” We take a similar approach for
payments to local governments.
Federal Spending in California. Figure 2 shows federal spending in California by
recipient, and then by program. (This list excludes some small programs. Please see the
methodology post for more information). In general, the figure displays funding
amounts paid during or around state fiscal year 2014-15 (in some cases the most recent
data available are from an earlier time period). Some amounts are published on
different bases that do not align with the state fiscal year (July 1st to June 30th). For
example, the refundable portion of the EITC is estimated on a tax year basis (which
runs from January 1st to December 31st) and defense contracts on a federal fiscal year
basis (October 1st to September 30th) .
The figure shows total annual federal expenditures in California are around $368
billion. (As we note in the methodology post, the estimates in this figure are subject to
some uncertainty and exclude some small federal spending amounts.) With an
estimated population of 38.9 million in early 2015, this corresponds to federal
payments of about $9,500 per person in the state of California.
Figure 2
Federal Spending on Major Programs in California
(In Billions)
Amount
Year
$82.6
2015
69.2
2015
Supplemental Nutrition Assistance Program (SNAP) - benefits
7.4
FFY 2013-14
Supplemental Security Income (SSI)
7.2
FY 2014-15
Housing choice vouchers (Section 8)
3.0
FFY 2014-15
Earned Income Tax Credit (EITC) (refundable portion)
2.8
2014
Child Tax Credit (refundable portion)
2.3
2013
Railroad retirement and disability benefits
0.6
2015
$33.8
FFY 2013-14
10.7
FFY 2013-14
Research contracts and grants to public universities
3.0
FFY 2012-13
Research contracts and grants to private universities
1.8
FFY 2012-13
$19.4
2015
Veterans benefits (except education)
12.8
FFY 2014-15
Military wages and salaries
10.3
2015
Federal employee retirement
5.7
FFY 2010
$4.0
FFY 2014-15
Education and vocational training for veterans
1.8
FFY 2014-15
Refundable tax credits for tuition
0.9
FFY 2013-14
Other major grants and funding for students
0.3
FFY 2013-14
$1.0
FY 2014-15
0.3
2014
Direct Payments to Individuals, Private Entities, and Universities
Income-Support and Retirement Benefits
Social Security
Medicare
Payments to Private Entities and Universities
Defense contracts (excludes universities)
Non-defense contracts (excludes universities)
Wages, Salaries, and Benefits for Current and Former Federal Employees
Federal civilian wages and salaries
Financial Aid to Students
Pell grants
Education-Related Payments
Head Start
Telecommunications and associated infrastructure for schools and libraries
Payments to State Government
Health and Human Services
Medicaid
$54.7
FY 2014-15
Child welfare services
2.1
FY 2014-15
Women, Infants, and Children (WIC)
1.2
FY 2014-15
SNAP - administration
1.1
FY 2014-15
Other major health and human services programs
1.2
FY 2014-15
$2.4
FY 2014-15
Supplemental services for low-income students
1.8
FY 2014-15
Special education
1.2
FY 2014-15
Workforce education and training
0.7
FY 2014-15
Other major education programs
1.5
FY 2014-15
$3.7
FFY 2014-15
0.6
FY 2014-15
Transportation
$5.1
FY 2014-15
Natural Resources and Enivornmental Protection
$0.5
FY 2014-15
Other
$1.1
FY 2014-15
Education and Workforce
Child nutrition
Income Security
Temporary Assistance to Needy Families (TANF)
Unemployment Insurance - administration
Payments to Local Governments
Direct payments to cities, counties, and special districts
Total
$8.2
FY 2014-15
$367.8
FFY = federal fiscal year and FY = fiscal year (California).
Most Federal Spending in California for Direct Payments. Most federal payments to
California are paid directly to individuals, private entities, and
universities—representing about 77 percent of the total. The state government receives
21 percent of total payments, which it primarily distributes to individuals, private
entities, school districts, and local governments (and keeps a small portion for state
operations). Local governments directly receive the remaining 2 percent of federal
expenditures. (Figure 2 displays only federal funds received directly by local
governments. Including funds passed through the state government, local governments
received over $18 billion in federal funds in 2014-15.)