San Mateo County to get $77M in state budget deal

That system has kept a fragile fiscal peace in prior years but, with only two-thirds of VLF paid to the county and its cities in last year’s budget and none originally allocated in the governor’s May budget proposal, the situation became dire and would have forced the county and cities to make steep service cuts, leaders warned.

The inclusion of $76,950,000 in funding in the state Assembly and Senate budget proposal is a positive step, legislators said, but it’s not a final determination. Representatives from both houses will formally vote to approve their version of the budget on Monday, at which point it will go back to the governor’s office for negotiations and a final signature. That process must be completed before July 1.

“It’s an important step forward, it’s a substantial achievement for us. It doesn’t fully resolve the issue,” Assemblymember Diane Papan, D-San Mateo, said.

Even if the nearly $77 million remains in the final version of the budget, it’s not a structural solution for San Mateo County’s ongoing issues with VLF dispersion, Papan emphasized, particularly because the money goes to fund essential needs like public safety and social services.

“Until it’s a done deal, I always worry, especially when you think about what goes to fund — childcare programs, parks, libraries, all those important things,” she said.

While the county is extremely grateful that local legislators pushed for VLF inclusion in the budget proposal, there’s still a gap of around $42 million that the county and cities will be forced to absorb, San Mateo County Executive Officer Mike Callagy said. That’s on top of the $38 million that was not included in the last fiscal year budget.

“It’s gone from catastrophic to a much better situation, but it’s still going to result in cuts to critical services,” he said. “We just can’t keep doing this. We have got to find a permanent fix. We’re really prevailing upon the [Department of Finance] and the governor to work with us to find a permanent solution.”

The county is slated to receive roughly 60% of the VLF funding, with cities receiving 40% distributed by size, Callagy said.

For San Bruno, which is dealing with an ongoing budget deficit exacerbated by VLF uncertainty, City Manager Alex McIntyre said he’s waiting for more details — and actual confirmation — before relying on the funding.

“I have to err on the side of, ‘I’ll know it when I see it.’ We need to know,” he said. “This is June 12 and we still don’t know a major funding source for the state of California … the state’s promises are going unfulfilled. We face this on several fronts.”

A provision in the state Senate-Assembly budget agreement would allow for the Department of Finance to allocate even more than the nearly $77 million, state Sen. Josh Becker, D-Menlo Park, said. Even if that isn’t fruitful, he emphasized that the money in the proposal could be vital to San Mateo County, though the process of securing it each year is not tenable.

“This is going to save a lot of services and save a lot of jobs,” he said. “Myself and my colleagues, it’s been our number one priority. We put an incredible amount of time, effort and relationship capital into this. We want to get a long-term fix, so we’re not doing this every year.”