California Gov. Gavin Newsom has signed a bill imposing a 25% tax on private detention centers that partner with ICE in the state. The measure, AB 1633, targets the gross income of any private detention facility, applying to federal, state and local contract recipients alike.
The tax revenue goes to a “Due Process for All Fund” for immigration-related services. The bill takes effect on July 1, 2028.
Newsom framed the move as a direct challenge to private profiteering in federal enforcement. In a press release, he said: “If we can’t kick out private facilities, we’ll go after their profits.”
There are eight ICE detention facilities in California, all privately operated. The GEO Group owns five of them. Imperial Valley Gateway Center LLC owns one more. Two were purchased by DHS in July but remain run by CoreCivic, with contracts through 2027 and 2029.
Who Owns Which Facility
| Facility | Owner |
|---|---|
| Five of eight | GEO Group |
| One | Imperial Valley Gateway Center LLC |
| Two purchased by DHS | CoreCivic |
Spakovsky’s Warning
Hans von Spakovsky, senior legal fellow and immigration expert with Advancing American Freedom, argued that the tax has a narrow purpose. He said: “It’s very clear that there’s only one purpose to this California gigantic tax increase, and that is to make sure that the federal government cannot find any private property owners, any private contractors in California that are willing to lease space to the federal government.”
He added that the alternative for the federal government is to look at all the federal properties the government actually owns, over which neither Newsom nor anyone else in California can impose any kind of tax. Those federal facilities could then be converted to detention use.
Spakovsky believes the government might begin evaluating where else it can find partnerships to meet its detention needs sooner rather than later.
“Look, if I was the federal government and I couldn’t find enough federal properties in California to do this, I would then go into neighboring friendlier states that I could quickly transport aliens I’ve detained and I would lease and rent facilities there.”
He suggested states like Arizona and Nevada might be eager for federal government money and increased employment from private contractors.
The Federal Response
The office of Gavin Newsom did not immediately respond to a request for comment from Fox News Digital.
The disagreement is over what the tax means for ICE’s ability to detain people. Newsom is using the tax code to discourage private contracts, while Spakovsky warns that the federal government will simply shift to federal property.
The tax does not take effect until July 1, 2028, giving the federal government years to plan around it.
The paper’s view is simple: this is a state targeting a federal program, and the paper favors the smaller, more limited role of state government.
Where the paper stands
The paper backs none of this and instead supports smaller government, meaning it backs neither the governor’s new tax nor the private detention industry, since both represent power gathering in one place. A tax on private detention income, whatever its stated aim, puts pressure on a federal system by taking aim at the profit margin of those who hold the contracts. That is a step toward a larger government presence, not a smaller one.
The tax does not take effect until July 1, 2028, so the consequences are not immediate; the story also leans heavily on a single conservative expert’s interpretation. The paper’s concern is with the direction, not the timing. The tax gives the state leverage over federal contracts, and the expert’s warning—that the federal government may turn to other states—shows how the power shifts in response.
What the reader should watch for is the pattern: a state government writing its own rules for federal work, and private contractors caught in the middle. The paper wants decisions made closer to the citizen, not gathered up in one place.
Source material: “Newsom slaps 25% tax on private detention centers in sweeping pushback against key Trump policy,” Fox News.
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