County Proposes $5.2 Billion Budget Amid State and Federal Uncertainty

REDWOOD CITY - County Executive Mike Callagy on Thursday released a $5.2 billion Recommended Budget for Fiscal Year 2026-27, a plan aimed at sustaining core services as the County continues efforts to recover the unprecedented taking of funds by the state and prepares for federal changes affecting health care and food assistance programs.

The Recommended Budget assumes that more than $157 million in withheld Vehicle License Fee (VLF) replacement funding will be restored by the State of California. Because the revenue makes up nearly one-fifth of the County's General Fund, the proposed budget also includes contingency reserves that would be used as a one-time bridge should the state fail to restore the funding.

"This budget reflects our best assessment of current conditions while recognizing that we are in a period of extraordinary uncertainty," Callagy said. "While the County remains fiscally stable, this environment requires a disciplined and thoughtful approach to sustain services and meet the needs of our residents."

Amid these fiscal pressures, the budget continues funding for major infrastructure and service initiatives that will position the County to meet essential services in the present and future, including the continued rollout of the County's electronic health record system across San Mateo Medical Center and its neighborhood clinics.

The proposal adds 15 positions focused on access to health care, public safety, survivor services and emergency coordination, including:

• Expanded dental staffing at the North County Wellness Center in South San Francisco.

• Staffing for the new Family Justice Center, which will provide legal, counseling and support services for survivors of domestic violence, elder abuse and sexual assault.

• Public safety positions supporting efforts to combat human trafficking, enhance forensic investigations and improve countywide emergency coordination during large-scale emergencies and disasters.

The budget also begins to prepare the County for significant impacts from federal policy changes affecting Medi-Cal and CalFresh.

Approximately 59,000 Medi-Cal beneficiaries in San Mateo County could be affected by new eligibility and renewal requirements, increasing the risk of coverage loss. CalFresh, the federal Supplemental Nutrition Assistance Program which serves about 33,000 residents, is also expected to see increased administrative workload tied to new work requirements and eligibility changes.

To respond, the Human Services Agency has set aside a one-time $12 million appropriation for CalFresh.

Four affordable housing developments are anticipated to begin construction in Fiscal Year 2026-27, adding 306 new homes. The Department of Housing also plans to award more than $29 million through the Affordable Housing Fund to support future developments.

County Health plans to invest $15 million through the Behavioral Health Services Act to expand and stabilize housing for individuals with behavioral health needs. Funding supports permanent supportive housing, rental assistance and on-site support services.

Officials said the budget prioritizes essential services while preparing for ongoing fiscal uncertainty.

Public Participation
The Board of Supervisors will consider the Recommended Budget during a public hearing on June 9 in the Board Chambers at 500 County Center, Redwood City.

Live interpretation in Spanish will be provided. Residents may also participate via Zoom or submit comments to [email protected].

Effie Milionis Verducci
Director of Strategic Communications & Community Partnerships
650-407-4915
[email protected]