SAN MATEO COUNTY LEADERS URGE STATE TO PROVIDE $157 MILLION IN FUNDING OWED TO 21 PENINSULA COMMUNITIES

Over 250 county leaders including elected officials and representatives from public safety, health, education, labor, housing, nonprofits, and more rallied at the Redwood City Fire Department Headquarters, warning that more than $1 billion will be withheld over the next decade if Sacramento fails to act now to fix a broken State funding mechanism.

REDWOOD CITY, CA - April 7, 2026 - In a powerful and unified call to action this morning, San Mateo County leaders gathered at Downtown Redwood City Fire Station 9 to appeal for inclusion in the State budget of in-lieu Vehicle License Fee (VLF) revenue that is legally owed to San Mateo County and its cities, and for enactment of a permanent fix to a broken State payment mechanism that is leaving the County uniquely and unfairly shortchanged without State action.

With urgency mounting and stakes escalating, leaders made clear: the clock is ticking.

President of the San Mateo County Board of Supervisors Noelia Corzo stated the County's position plainly: "Today our message to Governor Newsom and state leaders is clear: we need two things to correct this inequity - full payment of the outstanding amount owed, and a permanent legislative fix so this never happens again. This is not about asking for more. It is about receiving what the County and our 20 cities are legally entitled to, which amounts to over $157 million right now, and more than $1 billion over the next decade if this is not resolved."

At the heart of the issue is a stark inequity: while 55 California counties receive their full VLF funding, San Mateo County is one of just three counties statewide being shortchanged by an outdated State payment mechanism, unless the State takes action. The problem traces back to a 2004 State budget deal, when local governments accepted a permanently reduced VLF rate and contributed additional local funding to help balance the State budget, in exchange for reliable State replacement revenue.

That promise has not been kept.

Through no fault of their own, San Mateo County and its cities have been singled out and denied the full payments - an outcome that will persist unless the state acts.In a positive signal, yesterday (Monday, April 6) the Governor directed the Department of Finance to work with the County on a solution.

California State Assembly Member Diane Papan, who was unable to attend today's press conference but has been a leading voice among the State delegation fighting for an equitable solution, sent a stark warning: "With federal reductions looming, the burden on the State to ensure this critical funding is magnified. Failure to solve this will undermine San Mateo County's demonstrated leadership in expanding behavioral health and housing services and would jeopardize continued progress in these State priority areas."

Speakers representing all sectors across the Peninsula delivered a unified and urgent message: failure to restore these funds will trigger immediate and devastating consequences for essential services across the Peninsula.

Eight shelters housing nearly 3,000 people could be forced to close. More than 5,500 families and seniors at risk of eviction would lose rental assistance. Early literacy programs serving roughly 7,400 children would face cuts. Psychiatric services for hundreds of unhoused residents would end.

San Mateo County Supervisor Jackie Speier cut to the heart of the matter: "This is not simply a line item on a spreadsheet. It is whether there are enough fire engines to respond in an emergency. It is the difference between shelter beds being available or not. Every day Sacramento delays, real services go unfunded and real people go without."

Today, Senator Josh Becker (D-Menlo Park) issued the following statement on his continued efforts to create a permanent solution for the Vehicle Licensing Fee's (VLF) negative impact on the County of San Mateo: "VLF revenues support essential local services that residents and businesses rely on every day. Yet San Mateo County is one of only three counties that is being treated unfairly due to a flawed California funding formula created to address a state budget deficit long ago. Every year, the county is forced to fight for funding that supports critical, frontline services that have already been promised to us. This isn't just a technical issue; it's a matter of fairness. I will fight for every dollar our county is owed and push for a permanent fix so we can finally end this cycle of uncertainty."

Speakers also underscored a hard truth: the consequences of inaction will fall hardest on those least able to absorb them.

Laura Bent, CEO of Samaritan House, one of the county's largest social service providers, illustrated what's at stake: "Tens of millions of dollars in critical support will be lost for the people who need it most. These services are not 'nice to haves'; they save lives every day and ensure that the most vulnerable people in our communities are treated with dignity and given a chance to get back on their feet."

Public safety leaders warned that no community will be spared.

Central County Fire Chief Dave Pucci cautioned that "countywide, emergency response times will get longer, there will be fewer firefighters, fewer fire engines in our fleets, and it will be harder to maintain the vehicles, stations, and equipment we have".

Despite sending billions in tax revenues to Sacramento each year, San Mateo County is being denied funding it is legally owed, an inequity that stands in sharp contrast to how nearly every other county in California is treated.

Today's rally demonstrated overwhelming unity and resolve. All 20 cities in San Mateo County, alongside Mono and Alpine counties, have joined the County in legal action against the State to recover these funds. At the same time, the County has launched SMCFairFunding.orgto inform the public and to lay out the facts regarding the in-lieu VLF funding San Mateo County and its cities are rightfully owed.

The State Assembly Budget Subcommittee will hear the County's request for inclusion of VLF funding in the State Budget on Tuesday April 21st. The Governor has until late June to finalize the State budget.

Effie Milionis Verducci
Director, Strategic Communications & Community Partnerships - San Mateo County Executive's Office
Phone: 650-407-4915
Email: [email protected]