County of San Mateo
Fair Funding for San Mateo County's Communities
The State is Withholding More than $100M in Rightful Funding for San Mateo County and Cities
In 2004, the State of California reduced vehicle license fees and committed to replacing that revenue annually for every county and city in the state. For most of California, that commitment has been honored. For San Mateo County, it has not — the State is withholding more than a hundred million in funds the County and its cities are legally owed, and hundreds of millions more are at risk in future years.
How Much Funding Is Owed ↓$38M
shortfall endured in FY 2023-24 — the first year San Mateo County did not receive full payment
$119M
shortfall for FY 2024-25
21
jurisdictions in San Mateo County excluded from this funding
55
counties and 463 cities receive over $12B without interruption from this same state commitment
The Issue
How a 2004 Promise Created a Growing Funding Gap
A Promise Made in 2004
In 2004, the State replaced local Vehicle License Fee (VLF) revenue with an equivalent funding stream. Because the payment mechanism used to deliver that funding has become obsolete here, San Mateo County and its cities are now blocked from receiving their full amount due without State action.
It Works for 55 of 58 Counties
The State distributes more than $12 billion per year in VLF replacement funds statewide. Fifty-five counties receive every dollar they are owed, every year.
An Obsolete Payment Mechanism Denies San Mateo County its Funding
San Mateo County and all 20 cities are being denied their replacement funds because the payment mechanism has become obsolete here. The State has ensured the County and its cities are made whole for the full amount owed in the past but is no longer doing so, leaving 21 jurisdictions without the funding they were promised.
A Persistent Gap Without a Fix
State legislators and budget staff have acknowledged this exclusion for years but without a permanent fix, all of San Mateo Peninsula's residents, businesses, visitors, children, employers, and employees will be affected by the State's withholding of these critical dollars.
FY 2024–25
Shortfall by Jurisdiction
Search for your city or county below to see how much in VLF funding is being withheld from your community annually.
Total Countywide Shortfall
$119M
FY 2024–25
Find Your Jurisdiction
What's at Stake
Services that depend on this funding.
The payments being withheld amount to more than one hundred million dollars this last fiscal year alone; funds that are critical to supporting local services. The State's withholding of this money jeopardizes the future of these services.
Public Safety & Emergency Response
Healthcare & Mental Health Services
Programs for Seniors & Youth
Libraries & Child Literacy
Parks & Recreation
Pothole & Street Repairs
Homelessness Prevention & Affordable Housing
Wildfire Prevention & Storm Readiness
Our Response
What Are We Doing About It?
San Mateo County and its cities are aligned on a coordinated approach — in court, and through the Legislature to secure the payments the State is required to provide and to inform the public about the County's rights and activities.
Legal Action
In fall 2025, San Mateo County, Alpine County, Mono County, and their cities initiated court proceedings to compel the State to pay the outstanding amounts owed for FY 2023-24.
Legislative Engagement
San Mateo County and its cities are working with San Mateo County's state legislators to secure full funding in the State's annual budget, and a permanent legislative fix.
Education
San Mateo County and its cities are informing elected officials, the Governor's office, and the public of the County's rights and that San Mateo County must be treated consistently with every other county under state law.
Press & News
In the News
San Mateo County studies uncertain state funding source
Every City in San Mateo County Joins the County's Lawsuit Against State of California to Recover $38 Million Funding Shortfall
San Mateo County lawsuit exposes California's penchant for state budgeting tricks
