San Mateo County unveils proposed budget, economic uncertainty might lead to potential spending cuts
San Mateo County, California – On Thursday, officials from San Mateo County revealed a proposed budget of $4.9 billion for the 2025–2026 fiscal year. They were cautiously optimistic about the months to come. County Executive Mike Callagy’s proposed budget maintains the county’s 740,000 citizens’ fundamental services intact, but it comes at a time when the economy is struggling and there are huge uncertainties about how to pay for things in the future.
Callagy said that the financial situation for local governments is very problematic. The state of California is expecting a $14 billion budget shortfall, and county leaders are getting ready for prospective adjustments since federal help is still up in the air.
“In an environment marked by economic uncertainty and potentially significant policy shifts, we are preparing thoughtfully and ensuring we remain flexible,” Callagy said.
The county’s budget plan deals with both rising costs and sluggish revenues, as it strives to protect important services from future cuts. But Callagy was clear about what concerned him: one of the largest dangers is that the Vehicle License Fee Adjustment Amount might lose $114 million a year, which is a major source of state revenue for health care, public safety, housing, and other programs. He said the money is not part of the governor’s budget proposal at this time.
The budget of $4.9 billion is the first phase in a protracted process. On June 23, the Board of Supervisors will hold three days of public hearings where people and local advocates can speak out about the county’s spending intentions. The Board must approve a recommended budget by July 1 in order to keep its power to spend money. If the proposal is approved, it will need to be changed again, and there will be more budget hearings in September.
The uncertainty also affects social safety net programs that help thousands of the county’s most disadvantaged residents. Callagy said that changes could be coming to important programs like Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and Temporary Aid to Needy Families (TANF) this summer, depending on how state and federal budget decisions are made.
Callagy praised the county’s history of prudent financial management, saying that years of being conservative with money had left San Mateo in a better position to deal with unpredictability.
“We are prioritizing what the County is doing now, meeting the needs of today’s residents, while continuing to build toward the future,” he said. “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.”
County leaders said they will keep a careful eye on changes in policy and the economy at both the state and federal levels as the budget process moves forward over the next several months. They are determined to keep important services going for their community.
