San Mateo County leaders are bracing for a period of financial turbulence after the unveiling of a $4.9 billion budget proposal last week.
While most programs are set to continue, the county faces a tightening fiscal squeeze brought on by California’s projected $14 billion deficit and the impacts of federal budget cuts.
San Mateo County’s proposed spending for the 2026 fiscal year prioritizes programs for children, families, and seniors, as well as disaster preparedness and workforce housing, according to the budget document. Mental health support, identified by supervisors as a key priority, is also integrated across all these areas.
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A major concern is the anticipated loss of $114 million from the Vehicle License Fee Adjustment Amount, which helps counties pay for public safety, health, housing, and other services. San Mateo County’s share of this state revenue was not included in the governor’s latest proposed budget, according to county staff.
Callagy described the county’s budget as aiming to address immediate needs while also planning for the long term.
“This recommended budget strikes a careful balance: it addresses short-term issues head-on while keeping our eyes firmly on long-term impacts and opportunities,” he said.
Although exact figures on the impact of state and federal cuts are still emerging, the county already foresees several funding reductions and expirations.
The Home Safe Program, for example, which offered homeless prevention services for Adult Protective Services clients, ended when its state grant funding expired. This cut one temporary staff position and related subcontract costs. Although the program received three months of temporary funding for fiscal year 2025-26, it was discontinued.
Beyond program cuts, county officials are concerned about anticipated federal reductions to social safety net programs, such as Medicaid and food assistance.
These federal cuts could put more pressure on local resources and increase the workload for Human Services Agency staff, according to the county.
The federal budget for fiscal year 2026 is expected to be adopted in October, and depending on the severity of the cuts, the county may need to make further budget adjustments, county staff noted.
As San Mateo County deals with budget priorities in the coming weeks, it is also in the middle of a contentious removal process involving Sheriff Christina Corpus. She is embroiled in a corruption scandal and voters in a special election, which cost the county at least $4 million, granted the Board of Supervisors the power to remove her from office last March.
Corpus denied any wrongdoing and has refused to step down.
The $4.9 billion recommended budget is only the first step in the county’s multi-phase budget process. Public hearings are set to begin June 23. The Board of Supervisors is expected to adopt a spending plan by July 1. If approved, the budget will undergo further refinements ahead of a second round of hearings in September.
Elsewhere in the Bay Area, local public projects are also grappling with funding cuts. Earlier this month, Santa Clara County officials reported that $85.6 million in federal grants — largely for public health — had been canceled under the Trump administration.
In Pacifica last week, Rep. Sam Liccardo, D-San Jose, criticized the administration’s cuts to climate change programs after a long-anticipated $50 million federal grant to address severe coastal erosion along Beach Boulevard was withdrawn.
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