Budget and Policy Post
January 18, 2017

Federal Spending in California

Federal Expenditures to Local Governments

In this post, we describe the federal funding paid directly and indirectly to California local governments—excluding schools—and how those funds are used.

Local Governments Receive Funds Directly From the Federal Government and Indirectly From the State. As discussed in an earlier post, local governments—counties, cities, and special districts—received over $18 billion in federal funds in 2014-15. (For more information about the federal funding received by schools, see Post 4.) Of that amount, roughly $10 billion was passed on to local governments from the state and the remaining $8 billion was provided directly to local governments directly. Most of the federal funds from the state support county costs for health and human services programs, like Medi-Cal and CalWORKs.

Northern California Counties Receive the Most Funding Per Person. While the state’s most populous counties—like Los Angeles and San Diego—received more federal funding than rural counties, northern counties received more federal funding per person, as shown in Figure 1. Of the $18 billion received by local governments, counties received over half ($10 billion). (San Francisco, which is a city and a county, is included in our discussion of cities below.) The northern counties received more federal funding on a per-person basis in part because these counties have relatively small populations and received larger amounts for national forest related payments and other grants.

Figure 5 - Federal Funding to County Governments

Counties’ Federal Funds Primarily Support Health and Human Services Administration. Figure 2 shows the categories of federal funding received by counties. As mentioned above, the majority of federal funds to counties are to support health and human service programs. For some of these programs, like Medi-Cal, counties administer the programs by determining individuals’ eligibility and processing enrollment. For other programs, like CalWORKs, counties also provide services directly to individuals. Of the other grants and programs for which counties received federal funding, the largest was for road projects ($190 million).

Figure 1 - County Federal Funding Categories

Cities and Special Districts Receive Almost $8 Billion in Federal Funds. Cities received over $4 billion in federal funds in 2014-15. The federal Community Development Block Grant—supporting local housing and economic development activities—was the single largest program for which cities received federal funding ($231 million). Special district—like libraries, parks, and water districts, among others—received the remainder of the funds. Of this amount, over $850 million went to transit districts, which typically provide public bus and rail systems.