A broken promise could cost some California counties and cities millions of dollars

California made a promise 22 years ago to every county and city: if the state reduced the vehicle license fees that historically funded local governments, the state would replace those dollars, so communities could continue providing services residents depend on.

Those dollars are not discretionary. Every city and county receives them to fund firefighters, sheriff’s deputies, nurses, behavioral health services, affordable housing, parks, public facilities and safe streets. They help define quality of life in every community.

To distribute those funds, the state utilized an existing but unrelated payment mechanism associated with school districts. 

No one anticipated that process would one day stop working for a handful of counties while continuing to work for every other local government in California. Yet that is what happened.

Because of an unintended flaw in the funding system, San Mateo County  — and more recently Alpine and Mono counties— can no longer receive the full vehicle license fee funding California intended, not without additional state action. 

In recent years, San Mateo County’s legislative delegation successfully secured one-time budget appropriations to partially close the gap. That shows the state recognizes the problem. But recognition is not enough.

Without a permanent fix, San Mateo County and its 20 cities now face an annual shortfall of $226 million a year, beginning this fiscal year. 

That is the largest funding loss in our county’s modern history, greater than losses experienced during recessions, financial crises or other economic downturns. 

Unlike those events, this shortfall isn’t the result of economic conditions or policy choices; nor is it anticipated to be a time-limited challenge. It’s an unintended consequence of a broken, decades-old funding mechanism.

Our communities have not remained silent. This spring residents, business leaders, first responders, nonprofit organizations and local officials united to advocate for a solution. 

They sent dozens of letters and testified before budget committees. County representatives met repeatedly with the Department of Finance, advocating not only for San Mateo County but for any county that could face the same unintended consequence in the future.

The stakes could not be higher. Local governments cannot absorb a loss of this magnitude through reserves alone. 

Without a permanent solution, this funding cut would equate to approximately 1,000 county and city jobs. It would require reducing emergency response, behavioral health services, public health programs, housing initiatives and other essential services. 

Every community, business and family in our county would feel the impact. It won’t cripple San Mateo County and cities; it will destroy services like police and fire over time. 

We are not asking for special treatment. We are asking for equal treatment. Every other county receives this funding — more than $12 billion annually — without question or delay.

Counties are where California’s priorities become reality. When the state calls on local governments to expand behavioral health care, reduce homelessness, build housing or strengthen public safety, counties deliver. 

San Mateo County has built a state-of-the-art navigation center, converted hotels into permanent supportive housing, implemented CARE Court and expanded crisis response services. Those commitments require stable, reliable funding.

This issue extends beyond San Mateo County. If one community can lose funding it was promised because of an unintended flaw in state law, then others could someday face the same risk.

California has already acknowledged this inequity. Now it must permanently fix it. Government works when commitments are honored. 

San Mateo County is asking the state to keep its promise — for our residents today and for every community that could face this unintended consequence tomorrow.