Supervisors Approve $5.2 Billion Budget While Planning for Uncertainty Over State and Federal Funding

REDWOOD CITY - The San Mateo County Board of Supervisors on Tuesday approved a $5.2 billion budget for the 2026-27 fiscal year that maintains core County services while preparing for changes to federal health and nutrition programs and continued uncertainty over state funding.

The budget assumes full restoration of Vehicle License Fee replacement funding currently being withheld by the State of California. Because that revenue source represents 18 percent of the County's General Fund, the budget also includes contingency reserves that would serve as a temporary bridge should the funding not be restored.

Board President Noelia Corzo said the County must continue planning ahead while protecting essential services.

"I think this is the reality that we're in," Corzo said. "It's important we prepare for a future where we have difficult decisions to make and really assess what are needs versus what are nice-to-haves."

County Executive Mike Callagy warned the State's failure to restore VLF funding would have significant consequences for County services.

"We're going to have a dramatic amount of funding to make up," Callagy said. "It is such an enormous amount."

The budget also prepares for federal policy changes that could affect thousands of San Mateo County residents who rely on Medi-Cal and CalFresh. Approximately 59,000 Medi-Cal beneficiaries could face new eligibility and renewal requirements, while CalFresh, which serves about 33,000 county residents, is expected to see additional workload tied to new work requirements and eligibility changes.

The budget includes continued investments in affordable housing and behavioral health. Four affordable housing developments are expected to begin construction during the fiscal year, adding 306 homes, while the Department of Housing plans to award more than $29 million through the Affordable Housing Fund to support future developments.

County Health also plans to invest $15 million through the Behavioral Health Services Act to expand housing and support services for individuals with behavioral health needs.

The budget was approved on a 5-0 vote.

Marshall Wilson
Communications Officer
[email protected]