Which federal programs account for the largest transfers from California taxpayers to other states?
Executive summary
California was a net fiscal “donor” to the federal government in 2022 — sending more in federal taxes than it received back in federal spending — a gap nonpartisan researchers put between about $83 billion and $126 billion depending on whether pandemic-era aid is included (Rockefeller Institute; PolitiFact) [1] [2]. Available public datasets and state analyses show large federal inflows to California for Medicaid, education, and pandemic relief, but the sources provided do not publish a definitive, program-by-program ranking of which federal programs drive net transfers from California to other states, so the identification of specific programs must be framed as the most plausible drivers rather than direct, source-cited accounting [3] [4] [5].
1. The big picture: California’s donor-state status and the numbers behind it
The Rockefeller Institute’s balance-of-payments analysis — highlighted in reporting and fact-checking — finds that Californians paid substantially more in taxes to the federal government than the federal government distributed back to recipients in California in 2022, with the commonly cited gap of $83.1 billion and an alternate non‑COVID calculation of $126.5 billion [1] [2]; these figures underpin claims that California is the largest “donor” state in recent nonpandemic data [1].
2. What federal spending California does receive — and where it concentrates
Federal transfers to California are large in absolute terms — roughly $161.7 billion in transfers to state and local governments in FY2022 according to USAFacts — and a majority of those transfers (about 59% in FY2022) supported public‑welfare programs such as Medicaid and direct cash assistance, while federal funds overall drive more than a third of the state budget and support Medi‑Cal, education, and workforce programs [3] [6]. State analyses from the Legislative Analyst’s Office also assemble federal expenditures by major program and recipient within California, demonstrating there is rich data on what California receives even if it does not directly translate into net cross‑state flows [4].
3. Why funds flow “out” of California: taxes versus spending and the likely program drivers
The donor-state result is fundamentally a taxes‑paid versus spending‑received accounting: Californians and California businesses pay very large federal income and payroll taxes into the federal treasury, while federal spending is distributed nationwide based on formulas, program eligibilities, and grant competitions that often concentrate dollars in other states with different demographic and fiscal profiles [1] [5]. Absent a program‑level net flow table in the cited sources, the plausible large contributors to net outflows are the big, nationally distributed federal programs funded from broad federal revenues — notably retirement and health entitlements (Social Security and Medicare), major federal procurement and defense outlays located outside California, and formula and competitive grants that channel money to lower‑income or rural states — although that inference goes beyond the specific tables provided [5]. Recent federal initiatives that explicitly route large sums to all states — for example, CMS’s multibillion rural health awards announced in 2026 — illustrate how new, large national programs can redistribute federal dollars widely regardless of which states paid most taxes [7].
4. Data limitations, politicized narratives, and how to read claims
The available sources are clear about methodology and scope: Rockefeller’s portal aggregates payments and receipts by state but the public summaries in these snippets do not break net flows down into a definitive list of programs that are the largest net beneficiaries of California taxpayers’ dollars; independent outlets and state analysts like USAFacts and the LAO provide detailed receipts for California but not the mirror image of “where Californians’ taxes went” on a program-by-program basis [5] [3] [4]. Political actors selectively cite the donor‑state totals to make broader arguments about federal fairness; readers should note those totals depend on methodological choices (whether to include pandemic relief, for example) and that large national programs inherently produce cross‑state transfers as a feature rather than a bug [1] [2].
5. Bottom line
The best-sourced, direct answer is that analysts identify California as a large net donor to the federal government in recent non‑pandemic data, but the reporting provided does not supply a clean, program‑by‑program ranking showing which federal programs account for the largest transfers from California taxpayers to other states; the most plausible major drivers are national entitlement spending (retirement and health), defense and procurement, and large formula/competitive grants that favor other states’ needs — an inference rooted in how federal taxes are raised and how federal spending is allocated [1] [5] [3]. To move from plausible drivers to a definitive program list would require program-level, state-by-state net-flow tables not present in the cited materials [4] [5].