Federal Cuts May Affect This Bay Area County’s Budget For ‘25-26

SAN MATEO COUNTY — The Board of Supervisors in San Mateo County received the recommended budget Friday for the next fiscal year, but fear federal cuts may prevent them from approving it.

The recommended budget for the ‘25-26 fiscal year is for $4.9 billion but the states projected $14 billion deficit, and uncertainty around federal funding, has left local official preparing to brace themselves for challenging times ahead.

“In an environment marked by economic uncertainty and potentially significant policy shifts, we are preparing thoughtfully and ensuring we remain flexible,” said Michael Callagy, the San Mateo County executive officer.

Callagy and others are uneasy about the potential of losing $114 million annually from the Vehicle License Fee Adjustment Amount, which helps to fund public safety, health, housing and other local services.

“While this budget reflects the realities of increased pressures both with respect to revenues and expenses, we are prepared to respond to circumstances as they change,” Callagy said.

After receiving the recommended budget, the next step for the supervisors is to meet for three days of public hearing starting June 23. They must adopt the budget by July 1.

Callagy said is anticipating changes to programs serving thousands of residents such as Medicaid, Supplemental Nutrition Assistance Program and temporary aid to low-income families programs.

“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.”