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County Executive Mike Callagy unveiled a $4.2 billion budget plan amid growing concerns that the state of California could claim county revenue to balance its own books in the face of a tough economic environment.
While the county continues to provide programs and services, Callagy warned that fiscal headwinds from a shortfall in vehicle license fees (a form of property tax), along with changes to the state budget, threaten what It 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 funds, budget officials will face enormous challenges that could result in cuts to key services and initiatives including core programs that address the housing and homelessness crisis, he said.
And this key source of local revenue, which represents 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 center of the county but in cities across San Mateo County facing similar uncertainties.
The Governor Gavin Newsom This month it projected a budget deficit of about $56 billion over the next two fiscal years, which it aims 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 picture could look very different in September, when the Board of Supervisors will consider a final budget with revisions for the 2024-25 fiscal year.
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 Management to reinforce resilience measures and help residents plan and prepare.
In addition to this, it suggests adding two positions to the newly created Office of Labor Standards Compliance, to help protect the rights of workers; in addition to a wide 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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