California’s latest move against immigration detention is already stirring up a fight with Washington, and the stakes are bigger than a single tax hike. Gov. Gavin Newsom has signed a new law targeting private detention centers with a 25% tax, putting pressure on facilities that house ICE detainees and raising questions about how federal enforcement will keep working in the state.
Newsom framed the law as a direct shot at private detention operators and a way to blunt President Donald Trump’s immigration crackdown. He said, “If we can’t kick out private facilities, we’ll go after their profits,” and later added, “We’re also banning the Orwellian practice of using shock gloves in enforcement activity as well as further protecting access to our court system.”
The law applies to private detention centers that contract with ICE, along with other federal, state, and local detention arrangements. California has eight ICE detention facilities, and all of them are privately operated, which makes the state a major testing ground for this kind of policy. The tax revenue is set to flow into a fund labeled for immigration-related services.
That has triggered sharp pushback from immigration experts who say the tax could make it harder for the federal government to keep enough detention space available. Hans von Spakovsky, a senior legal fellow with Advancing American Freedom, argued that the real goal is to squeeze private operators until they walk away. “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 said.
Spakovsky also warned that if private operators leave, ICE would have to scramble for alternatives. That could mean looking for federal property already under government control, or converting warehouses and office space into detention sites, which is hardly a quick fix. He said the government may have to start hunting for space long before the law actually kicks in.
The new measure is AB 1633, one of the bills Newsom signed during a broad push that included other restrictions on enforcement tactics. The law is scheduled to take effect on July 1, 2028, and its timing is notable because it lands during the final year of Trump’s second term. By then, the pressure on detention capacity could already be baked into federal planning.
California’s detention network is heavily tied to private companies. The GEO Group owns five facilities in the state, Imperial Valley Gateway Center LLC owns one, and two more are run by CoreCivic under federal contracts that extend into 2027 and 2029. That setup gives the tax a direct line into the business model that supports a big chunk of ICE’s footprint in California.
Newsom’s team has tried to sell the law as a matter of state control and local values. “We may not be able to dictate federal immigration policy, but we can make clear that activities taking place in California will be subject to California law,” he said. It is a familiar California message, but this one goes straight at the machinery behind federal detention.
Spakovsky said the federal government would likely have to adapt instead of just absorbing the cost. “If you look at that report, currently ICE has about enough detention space for about sixty-six thousand aliens. Okay, that’s the full size of the federal government’s detention capacity,” he said, pointing to the limited room available if contractors pull back or new costs scare them off.
He also suggested that other states could become more attractive if California becomes too expensive or too hostile to private detention partners. Arizona and Nevada were both floated as possible alternatives, especially if the federal government wants faster access to facilities and willing contractors. That kind of shift would send money and jobs somewhere else, while California keeps making the rules tighter.
The whole fight is bigger than one state tax and one set of detention centers. It is a clash over who controls immigration enforcement, who pays for it, and how much leverage a state can use against a federal system that still needs private space to function. For now, California has made its move, and the pressure is landing exactly where it was aimed.
