San Mateo Co. demands $157 million from CA in vehicle license fee revenue

REDWOOD CITY, Calif. (KGO) -- San Mateo County leaders are pressing California to release more than $157 million, which they say is owed to the county, warning that failure to do so could result in sweeping cuts to local services.

County officials say the disputed money comes from Vehicle License Fee revenue and has been withheld by the state. On Tuesday, more than 250 county leaders representing a range of departments and organizations gathered at a press conference in Redwood City to demand that the funds be paid.

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Officials say the money supports essential services, including police and fire departments, rental assistance, services for unhoused residents, after-school programs and infrastructure repairs such as potholes. Without it, leaders warn, the county could be forced to scale back.

Local leaders say the fight over the funds has stretched on for years and dates back to changes made in 2011, when the state shifted certain local tax revenues to help balance its budget. County leaders described that funding mechanism as "outdated" and said local governments were shortchanged as a result.

They argue that continued withholding of the funds threatens the quality of life in San Mateo County.

"For the County of San Mateo itself, it is incredibly dire," said Jackie Speier, a San Mateo County supervisor. "If the state stops returning the money we have owed to us, the result for San Mateo County will be a 19% cut in our general fund."

The county filed a lawsuit in 2023 seeking to recover the money. The state has disputed the claim, and the case has not yet been resolved in court.

In a statement, the California Department of Finance said,

"While this issue is now being litigated, the county doesn't have a legal entitlement to these funds - the state has provided them to the county in the past only on a discretionary basis."

County leaders said Tuesday that in the past 24 hours, they have had what they described as their first productive discussions with leadership at the Department of Finance about a plan to replace Vehicle License Fee funding for San Mateo County and its cities. Even so, leaders said they will continue to push until a permanent solution is reached.