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County Executive Mike Callagy unveiled a $4.2 billion budget plan amid growing concerns that the state of California could demand county revenue to balance its own books in a tough economic environment.
While the county continues to provide programs and services, Callagy warned that fiscal hurdles stemming from a shortfall in vehicle license fees (a form of property tax), coupled with changes in the state budget, threaten what is now a balanced budget.
“The current economic environment poses challenges to the financial stability of our county,” Callagy said. “We advocate for a cautious fiscal approach given the difficult economic times we face.”
The Board of Supervisors will hold a public hearing on the proposed budget on June 25.
According to Callagy, over two fiscal years, the state owes the county more than $100 million in vehicle license fee revenue.
Without the funding, budget officials will face enormous challenges that could result in cuts to key services and initiatives including core programs addressing the housing and homelessness crisis, he said.
This key source of local revenue, which accounts for 18 percent of the county's general operating fund, is not included in Governor Newsom's proposed state budget, raising alarms not only in the county center but in cities across San Mateo County facing similar uncertainties.
The Governor Gavin Newsom This month, the U.S. government projected a budget deficit of about $56 billion over the next two fiscal years, which it plans to balance through $30 billion in ongoing, one-time spending cuts.
With budget hearings underway in Sacramento, it remains uncertain how potential cuts in state funding will affect local programs.
So the fiscal outlook could look very different in September, when the Board of Supervisors will consider a final budget with revisions for fiscal year 2024-25.
Calling for “a balance between responsible budgeting and the continued delivery of essential services,” Callagy recommends adding five positions to the Department of Housing to support efforts to increase the supply of affordable housing, as well as adding five positions to the Department of Emergency Management to bolster resiliency measures and help residents plan and prepare.
In addition, it suggests adding two positions to the newly created Office of Labor Standards Enforcement to help protect workers' rights, as well as a broad range of investments in capital projects to improve parks and complete the Cordilleras Health and Healing Campus.
At the June 25 meeting, supervisors will also consider staff recommendations on where to invest $12 million in services for children, families and seniors.
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