San Mateo County sues state, saying it illegally withheld $38 million

"The county asserted that the state violated a 2004 budget deal in which counties and cities agreed to give up a portion of vehicle licensing fees and local property taxes to help close the state budget deficit. To repay counties, the state Legislature guaranteed funding for school districts where property taxes alone do not cover school budget needs, according to the county."

"However, due to having a high number of districts where property taxes cover school funding needs, San Mateo County has experienced a gap between revenue lost and compensation provided since 2012, the county said. To fill the gap, the state has provided additional supplemental funding to the county each year."

"The lawsuit filed Monday alleges that for the 2023-2024 fiscal year, the state owed $114.3 million in additional supplemental funding, but only paid $76.5 million, shorting the county government and the 20 cities within the county of about $37.75 million in total. The funding shortfall will threaten core local services, including health care, public safety, and affordable housing, local leaders said."

""These dollars pay for the things in our local budgets that residents rely on every day - from emergency response and health care to housing and public safety," San Mateo County Supervisor Jackie Speier said in a statement Wednesday. "The state made a promise, and breaking it doesn't just hurt local government budgets, it hurts our residents.""

San Mateo County filed suit against the state of California alleging $38 million was withheld under a 2004 budget deal. The 2004 agreement had counties and cities cede portions of vehicle licensing fees and local property taxes to help close the state budget deficit, with the Legislature guaranteeing extra funding to school districts whose property taxes do not cover budget needs. San Mateo says a high number of its districts cover needs with property taxes, creating a compensation gap since 2012 that the state supplemented annually. The county alleges the state owed $114.3 million for 2023-24 but paid only $76.5 million, shorting the county and 20 cities by about $37.75 million and threatening core services. The lawsuit names the state Finance director and the State Controller as defendants.

Read at Padailypost