SAN DIEGO, Calif. — By Jose E. Navarro, The Navarro Report | September 25, 2026
In the final days of the legislative session that ended August 31, California lawmakers approved roughly $1.3 billion in projects for their home districts. Against a $352 billion state budget, that is about 0.4 percent, the kind of sum a budget office rounds away. What deserves a controller’s attention is not the size. It is how the money moved: through private wish lists, with no requester names attached, in bills heard days before the vote.
The numbers, reported by CalMatters, show where it landed. About 42 percent, more than $550 million, went to nonprofits and other nongovernmental organizations. Another $93 million went to arts, museums and murals, and the rest to city and county projects such as parks, pools, roads and wildfire mitigation. Los Angeles County alone received at least $300 million. Single items ranged from $125 million to convert a defunct Bay Area horse track into a park to $1 million for a retirement fund for mixed martial arts fighters.
The geography is harder to defend. Santa Barbara County, the home of the Senate leader, drew more than $70 million for about 450,000 residents, over $160 per person. Tulare County, a Republican-led county of 485,000 people, received $200,000, roughly 41 cents per person. Seventeen counties, mostly rural and Republican-led, received no identifiable earmark at all. The year before, more than $100 million reached the district of the previous Senate leader alone. One year could be chance. Two years begins to look like a pattern.
The process explains the pattern. Leaders set informal caps, about $5 million per Senate Democrat this year, and members submit requests privately. “It’s a confidential process between each office and leadership,” Senator Dave Cortese said, and he asked why it could not happen earlier “so the public could just see what’s going on.” Julie Baker of California for the Arts made the fairness point plainly: it is “somewhat inequitable to have a grant making process that everyone’s competing over and then have a process that’s non-transparent.”
The timing sharpens the question. In January, CalMatters reported an $18 billion deficit looming over the governor’s final budget. Yet, according to CalMatters, leadership released a substantial share of the earmark money in the last 48 hours of the session, even as it cited budget constraints elsewhere. A state that says it must ration cannot also treat $1.3 billion as pocket change. Scarcity is precisely when a budget owes the public a reason for each choice.
I look at this as someone who has spent two decades in nonprofit management and government contract compliance, and the contrast is instructive. A nonprofit that wins a competitive state grant faces published criteria, scoring, conflict-of-interest disclosures, an award agreement with deliverables, periodic reporting and the possibility of clawback. An earmarked grant, as far as the reporting shows, may carry none of that.
There is a specific reason this matters. California’s Nonprofit Integrity Act requires audited financial statements from charities with $2 million or more in gross revenue. As I read the guidance, government grant income does not count toward that threshold when the government requires an accounting of the funds. That makes the accounting clause in the award agreement the essential control. Whether the earmark agreements contain one is a fact the public cannot see, and the reporting so far does not say. That is the question I would ask every recipient and every agency that disburses the money.
Recipients have a stake in the answer, too. A nonprofit that receives an unexplained line-item grant, with no clear award terms to point to, is exposed if questions arrive later. Explicit terms protect honest organizations from the reputational cost of the few that misuse public money, and they let boards document diligence.
None of this argues against earmarks. Some fund real needs, and a $125 million park may prove an excellent investment. But nobody outside the room can judge that. Without a stated need, a cost estimate, matching funds or a maintenance plan, a $125 million line item cannot be told apart from a favor.
The fix is pragmatic and cheap. First, publish each request, with the requesting member’s name and a one-paragraph justification, at least 30 days before any vote. Second, require a standard award agreement with deliverables, reporting dates and repayment terms for unspent or misused funds. Third, have the Department of Finance or the State Auditor report within a year on what each earmark delivered. Fourth, publish a per-resident distribution table so that a 41-cent county and a $160 county are visible in the same chart.
Sacramento asks nonprofits and local agencies to document every dollar, and rightly so. The Legislature can hold its own $1.3 billion to the same standard, and it should do so well before the next session, because sunlight is far cheaper than the next audit.
Human-Directed AI Journalism
This article was produced under a human-directed AI journalism model: research, structure, editorial judgment, and final approval by Jose E. Navarro, MBA; drafted with AI assistance. The Navarro Report | navarro-report.com | jose@navarro-report.com
About the author: Jose E. Navarro is a financial controller and public finance analyst with 20+ years in public finance, nonprofit management, and government contract compliance.