Hundreds of San Mateo County workers and elected officials rallied Tuesday in Redwood City to demand that the state of California pay the county millions of dollars in owed funding.
According to the county, it has so far been shorted about $157 million of legally owed funding from the state.
“We’re not going to take no for an answer when it comes to restoring the money that is owed to the cities and county of San Mateo,” said San Mateo County Supervisor Jackie Speier in a speech. “This is a simple question about fairness, and we are demanding fairness, Governor Newsom.”
That money was supposed to go to the county and its cities as part of a 2004 budget agreement known as the Vehicle License Fee Swap, or VLF Swap, in which local governments and counties gave up their vehicle license fee revenues to help the state close its budget deficit.
In exchange, cities and counties agreed to receive annual property tax allocations known as the Vehicle License Fee Adjustment Amount, or VLFAA.
But due to an “outdated” and “broken” funding mechanism, the state has repeatedly singled out San Mateo County, neglecting to pay the money in full for several years, the county said.
Impacts on safety, housing, services
With budget discussions and decisions soon approaching in the county and its cities, the need to secure the rest of the obligated funding from the state is immediate, local officials said.
“The local leaders who are gathered here today know exactly what’s at stake,” said Joan Dentler, a representative for state Sen. Josh Becker, D-Menlo Park. “This is not abstract. This directly impacts public safety, health services, housing and homelessness programs.”
A large crowd — including local elected officials, service workers, county employees, and police and firefighters from across the county — gathered in front of a fire station in downtown Redwood City in a show of regional solidarity.
“To be clear, this is money that our own local taxpayers contributed,” said U.S. Rep. Kevin Mullin, D-South San Francisco. “It’s money our communities are entitled to.”
Local leaders from throughout the county spoke about how communities could be impacted if they do not receive the funding.
“These are the real-world consequences to the state’s broken promise,” said Redwood City Mayor Elmer Martinez Saballos. “It could mean losing our downtown library, or it could mean losing every single youth program and all of our community events combined.”
Ken Stenquist, the police chief of Belmont and president of the San Mateo County Police Chiefs and Sheriff Association, explained the potential impacts on public safety if the funding is not received.
“The loss of these funds means eliminating our domestic violence programs,” Stenquist said. “It forces the closure of our gun buyback program and gun violence prevention initiatives.”
To meet its Vehicle License Fee Swap obligations, the state created a system that ties the promised VLFAA funding to “non-basic-aid” school district funding. Non-basic-aid school districts are those whose property taxes alone do not cover minimum funding requirements.
However, many school districts in San Mateo County are considered “basic aid,” meaning that they receive minimal state funding because property tax revenues do cover the minimum funding requirements.
This difference in funding mechanisms, the county argues, has shorted the county and its cities millions of dollars in obligated funding from VLFAA.
“Sacramento promised replacement of the funds to the counties and cities whose funding was cut,” said San Mateo County Board of Supervisors President Noelia Corzo. “That promise has been honored in almost every other county in the state, all of which are being paid in full. But the residents in San Mateo County are no longer being paid.”
The county has already sued, accusing the state and the California Department of Finance of failing to meet its financial obligations to the county and its cities. The litigation is still ongoing.
Mounting pressure to resolve the issue has appeared to spark some movement toward achieving a resolution. Talks between the county and the state have recently resumed.
“In the last 24 hours, we have had the very first productive discussion with leadership at the California Department of Finance about a plan to replace VLF funding for our county and our cities,” Corzo said. “It is long overdue.”
The county and its cities are demanding a full repayment and a permanent legislative solution to address the funding lapse.
“Governor Newsom, we’re asking you show up for the people who are counting on you,” Martinez Saballos said.
