REDWOOD CITY, Calif. – The San Mateo County Board of Supervisors on Tuesday adopted a budget designed to maintain essential services while preparing for future needs and uncertainty in state and federal funding.

The County’s final 2026-27 budget continues funding for health care, affordable housing, food assistance, public safety and other key services while moving forward with investments in long-term needs.

“We are expecting significant fiscal changes from the state and federal levels, and this budget will allow us to continue providing the services that tens of thousands of residents rely on us for,” Board President Noelia Corzo said. “We are committed to softening the blow for our county’s most vulnerable residents while preparing us all for what comes next.”

Changes on the horizon include new federal eligibility, work and documentation requirements for Medi-Cal beneficiaries, along with funding changes that could increase the number of uninsured residents who turn to County services. About 52,000 Medi-Cal beneficiaries in San Mateo County are expected to navigate the new requirements.

Without state action, San Mateo County could lose up to 1,000 jobs – 600 of them within the County government alone – and be forced to cut vital programs relied on by the county’s most vulnerable residents.

This is driven by a persistent and worsening Vehicle License Fee revenue withholding that the state has yet to resolve with San Mateo County and other affected jurisdictions. The estimated shortfall for the County and its 20 cities in 2025-26 stands at $226 million and will surpass $1 billion by 2030, creating a loss that will be felt in every community and sector across the county.

The state has committed to working with San Mateo County and other affected jurisdictions toward a long-term solution to close this gap. But a commitment to talk is not a commitment to pay, and the time for talk has run out. 

“The state made a promise to every county more than twenty years ago, and these last few years it has used a broken payment mechanism to renege on that promise, requiring counties and legislators to fight every year for an eleventh-hour budget appropriation. It is long past due for the state to correct the mechanism or find another long term solution to honor their original promise,” County Executive Mike Callagy said. “Towards this end, we are budgeting with the expectation the State will meet its obligations and provide us with the money we are owed, allowing us to continue providing services such as housing, health care, mental health response, public safety and others that are essential to our residents and advance the state’s priorities.”

The 2026-27 budget invests in projects intended to meet long-term community needs, including housing, child care, roads, parks and County facilities. The budget includes $793 million for funding previously-approved capital projects.

“We have done extensive planning to look at what our long-term needs will be, and putting off necessary projects only makes them more expensive,” Callagy said. “Construction costs continue to rise. It makes fiscal sense to move forward now.”

The final budget totals $6.2 billion, including approximately $983 million that reflects money left over from the prior fiscal year for projects and programs approved but not completed by June 30. As that work extends into the new fiscal year, the unspent funding rolls over into the new budget so it can be finished, increasing the budget even though the money was set aside previously. The final budget adds just three net positions, bringing the total number of authorized positions to 5,948.

The budget also maintains $624.8 million in General Fund reserves and contingencies, equal to 15.6% of net appropriations and slightly above the County’s reserve requirement. The reserves provide flexibility to respond to economic changes, unexpected costs and uncertainty in state and federal funding.

Among the investments are $50 million for workforce housing, $35 million for Coastside projects, $10 million for a child care initiative and $5 million for Parks projects, which are accessed by countywide constituencies and residents. The budget also includes a $7 million pledge to the American Cancer Society’s planned Bay Area Hope Lodge, part of a larger fundraising effort to build a facility that would provide free lodging to cancer patients and their caregivers. 

About San Mateo County
Established in 1856, the County of San Mateo stretches from the Pacific Ocean to San Francisco Bay and includes 20 cities and rural communities. Home to more than 750,000 residents, it is one of California’s most diverse counties with an economy driven by innovation, life sciences, agriculture and international trade and travel. In addition to serving unincorporated communities, the County provides countywide services that support the health, safety and quality of life of residents. Learn more at smcgov.org.