San Mateo County is taking a bold stand against the state of California, filing a lawsuit that could have serious implications for local community services. The county alleges that the state has shortchanged them nearly $38 million from a budget agreement dating back to 2004, potentially threatening critical local resources like healthcare, public safety, and affordable housing.

The dispute centers around a complex budget deal where counties and cities originally agreed to give up portions of vehicle licensing fees and local property taxes to help close a state budget deficit. In return, the state promised to provide supplemental funding to school districts where property taxes alone cannot cover educational expenses.

According to county officials, San Mateo County has experienced a consistent funding gap since 2012. For the 2023-24 fiscal year, the county claims the state owed $114.3 million in supplemental funding but only paid $76.5 million, effectively shorting local governments by approximately $37.75 million.

Supervisor Jackie Speier emphasized the potential impact, stating that these funds are crucial for everyday services residents depend on. “The state made a promise, and breaking it doesn’t just hurt local government budgets, it hurts our residents,” Speier explained.

Interestingly, the state reportedly paid the full amount owed under this budget deal to local jurisdictions in 55 other counties, making San Mateo’s situation particularly noteworthy. The lawsuit names California Department of Finance director Joe Stephenshaw and State Controller Malia Cohen as defendants.

As of now, the California Department of Finance has not officially responded, with spokesperson H.D. Palmer indicating they have not yet been formally served with the legal filing.

This lawsuit highlights the ongoing challenges local governments face in securing adequate funding and maintaining essential community services. The outcome could potentially set a precedent for how states honor long-standing financial commitments to local jurisdictions.

The case serves as a critical reminder of the complex financial relationships between state and local governments, and how budget decisions can directly impact the everyday lives of residents.