Redwood City braces for a long-term deficit

The budgetary concerns are not unique to Redwood City, especially as municipalities throughout San Mateo County are faced with lower projected revenue as a result of the state denying key funds, or in-lieu vehicle license fees. The funds are related to vehicle license fees paid by residents, which are directed to the state and then subsequently reimbursed to cities, typically by the following fiscal year.

Likely triggered by its own severe projected deficit — about $28 billion according to Gov. Gavin Newsom’s revised budget — the state may withhold what it owes to San Mateo County, and it’s one of only three counties being denied such funds.

The issue has drawn criticism from state representatives, such as Assemblymember Diane Papan, D-San Mateo, down to county officials and local councilmembers. Despite its inclusion in a recent legislative budget, Mayor Jeff Gee said that doesn’t mean the city will actually end up receiving the reimbursement.

“This is a very volatile funding source,” Gee said. “The status quo that we have in our services is probably not a reasonable expectation. We will have to align our programs and our services with the budget, whatever it may be.” 

Many cities in the county are also examining ways to generate more revenue, and many, including Redwood City, are looking at changing their business license tax structures to do so. The issue could go before voters in several jurisdictions come November. 

But the city’s more healthy fiscal position, at least compared to some of its neighbors, allows it to be more selective on where to focus one-time funds. Staff cited several priority programs as a result of a community survey, one of which includes a million-dollar allocation for security cameras in certain parts of the city, though the recommendation was not met so favorably from Vice Mayor Lissette Espinoza-Garnica and Councilmember Chris Sturkin. Both stated they’d prefer at least part of the money currently allocated for cameras instead used on programs that may divert youth from entering the criminal justice system.

“I would say that the best way of spending one-time funds would be focusing more on prevention services than on a service or program after a crime or incident occurred,” Espinoza-Garnica said. “Just throwing police officers or surveillance cameras to address crime doesn’t really reduce it, it just perpetuates the cycle of criminalization.” 

Other high-priority, one-time funds would likely support sidewalk repairs, traffic signal replacement, the Broadway Pedestrian Mall and construction of more ramps as part of the Americans with Disabilities Act program.

Another budget discussion will be Monday, June 24.