Speaking to reporters, Newsom denounced the fund as a "slush fund" and pledged to block Californians from financially benefiting from it.

"Anyone from California that receives any of those funds, we want to tax 100 percent of those proceeds," Newsom said during a press conference.

"He pardoned all of those folks that were beating up cops and absolved them, providing them 1.776 billion dollars," Newsom said. "So not only do you get a pardon, you get rewarded. That's why this is needed."

The fund was established as part of Trump's settlement with the Department of Justice stemming from his lawsuit against the IRS over the leak of his tax returns.

Trump has described the program as restitution for Americans harmed by what he called politically motivated government actions during the Biden administration.

Last week, Trump defended the fund as compensation for people "badly abused by an evil, corrupt, and weaponized Biden Administration."

Democrats in several blue states are now attempting to block recipients from keeping any payouts tied to the program.

In New York, Democratic Assemblyman Alex Bores introduced legislation that would similarly impose a 100 percent tax on recipients of the fund.

State Sen. Mike Gianaris said Democrats in Albany are pushing to advance the measure before the legislative session ends next week.

"There's widespread, bipartisan agreement that this is baldfaced corruption at its worst and if we have the ability in New York to combat it by ensuring that none of this money benefits anyone in our state's borders, I'd expect there'd be widespread support for that idea," Gianaris said.

Democratic lawmakers in New Jersey are also drafting similar legislation.

State Sen. Andrew Zwicker called the proposal "a brilliant counter move to Trump's corruption."