Gavin Newsom signed a 25% tax on private detention operators on September 29, 2026, and called it protection from President Trump’s “Orwellian” immigration tactics. It is a press release. The bill does not name ICE. In California, the operators it taxes are the ones running ICE facilities. Fox News reported that all eight ICE detention centers in the state are privately run. The tax also covers a state or local private detention contract. It does not take effect until July 1, 2028. Newsom will be gone. The next governor inherits the bill, and the fight.
Assembly Bill 1633, by Matt Haney of San Francisco, takes 25% of an operator’s California-source gross income starting July 1, 2028. The bill defines that income as gross income derived from or attributable to this state. Operators already pay the 8.84% corporate tax on net income. This is an extra levy on the gross. The legislative counsel’s digest says the tax is 25% of gross income “for the prior fiscal year.” Section 53002(a) imposes it on gross income “for that fiscal year.” Section 53006 makes the tax due on or before July 31 after the prior fiscal year closes. The digest and the due date point to the year just ended. The imposition line does not. The bill never resolves the difference. Newsom is term-limited and not on the 2026 ballot. His second term ends when the next governor is sworn in on January 4, 2027. The tax does not start until about 18 months after he is gone.
The check does not go to the high-speed rail line voters were promised in 2008, the San Francisco-to-Los Angeles system that was supposed to open in 2020. It does not go to roads, schools, or to the homeless. HUD’s 2025 count put California at 181,934 people, closer to a quarter of the national total of 745,652 than the 30% figure often cited. Fourteen of the state’s 44 continuums of care did not do a new unsheltered count, and HUD carried forward 2024 figures for those places. None of it fixes a project he already lost, the cities, or a power bill.
California’s average retail electricity price in 2025 was 27.63 cents a kilowatt-hour, more than double the national average of 13.63 cents, second only to Hawaii, and the largest absolute inflation-adjusted increase of any state since 2018, a 29.9% rise, according to an Institute for Energy Research analysis of EIA data.
Through June 2026, the Center for Jobs ranked California first among the contiguous states for residential, commercial, and industrial rates. Industrial power ran 21.64 cents, about 160% above the rest of the country.
Commercial and industrial customers paid an estimated $21.5 billion more than ratepayers elsewhere for the same electricity. That is the renewable mandate, the transmission buildout, the cap-and-trade charge, and the permitting stack, passed through to the meter.
Refinery capacity shrank. In-state oil and gas production shrank. Gasoline stayed among the highest in the country. A factory does not need a speech to understand the math. It leaves. Instead, the signed law puts the money in a Due Process for All Fund for immigration-related services, the legal help and family services the backers said the tax was for. The fund is spent only upon appropriation by the Legislature. The companion bill that would also have created that fund, AB 2465, was vetoed on September 30, 2026. AB 1633 creates the fund on its own. This, all while the lost contracts keep dangling.
San Francisco was the signing. Los Angeles, Oakland, and San Francisco are the record: tents, open drug use, closed storefronts, and smash-and-grabs. His administration spent years calling that a housing strategy. This exemption does not sweep an encampment, reopen a pharmacy, or put an officer on a corner.
The Federal Railroad Administration terminated about $4 billion in high-speed rail grants on July 16, 2025, Obama- and Biden-era awards, after a review cited missed deadlines, change orders, and no viable path. California sued, then filed to drop the case on December 23, 2025. The court entered the dismissal on January 7, 2026. Reuters reported that the Transportation Department cancelled another $175 million that August. The Authority still aims the Merced-to-Bakersfield segment at 2033. The review said there is no viable path to that date.
The Authority’s own 2026 business plan puts an optimized Phase 1 at about $126.1 billion and a re-estimate of the full prior Phase 1 scope at about $231.3 billion.
The Department of Energy cancelled California clean-energy awards in October 2025. An SFGATE tally put the state share above $3.1 billion across 79 grants, the most of any state, including $1.2 billion for the ARCHES hydrogen hub. Politico put the state grid award at about $631 million.
Attorney General Rob Bonta said in May 2025 that California’s exposure on federal public-health grants was more than $972 million. A federal court then preliminarily blocked those terminations while the case went forward. The Department of Education ended about $350 million in fiscal 2025 grants for minority-serving programs. California, with 167 Hispanic-Serving campuses, took the largest hit: at least $20 million at community colleges and about $43 million at Cal State.
The tax fails to backfill the rail money, the energy awards, or the education grants. He signed a tax due in July 2028 and, in the same September 29 package, signed a shock-glove ban, more oversight, and a ban on using state parking lots to stage immigration arrests. Those are companion bills, not provisions of AB 1633. Hans von Spakovsky of Advancing American Freedom told Fox the likely result is not fewer detainees. It is warehouses and office space, because the purpose-built centers got priced out of the contract.
None of this closes a facility, lays track, reopens a store, helps the homeless, or gives residents a refund on their power bill. It tells a contractor what California has already told the companies that left: the state will take a quarter of the California-source gross for a job it will not do. Newsom’s statement called the package transparency, accountability, and oversight.
Some already treat him as a 2028 candidate. The tribute fixes none of the record he would run on. A presidential bid would ask the country to overlook the state he governed and did not fix.
