Vehicle License Fee funding
Over $1 billion at stake by 2030 for San Mateo County and its cities
In 2004, the State of California reduced vehicle license fees and committed to replacing that revenue every year for every county and city. For San Mateo County, that commitment has not been honored: the State is withholding $226 million owed for FY 2025-26 alone.
$226Mwithheld from the County and its cities for FY 2025-26
Update, August 2026
The County and its cities released a new fact sheet on the Vehicle License Fee shortfall.
Read the fact sheetHow much funding is owed
- $226M owed to San Mateo County and its cities for FY 2025-26
- $1B+ at stake by 2030 without full repayment and a permanent fix
- 21 jurisdictions in San Mateo County excluded from this funding
- $12B in VLF funding paid in full each year to other counties and cities
A promise made in 2004
The State replaced local Vehicle License Fee revenue with an equivalent funding stream. Because the payment mechanism has become outdated here, San Mateo County and all 20 cities are blocked from receiving their full amount due without State action. Every other Bay Area county receives its full funding.
Key dates
2004
The State makes a promise
The State reduces vehicle license fees and commits to replacing the revenue for every county and city.
March 2026
Letters to the State budget chairs
The County, its cities and the local delegation ask for full funding in the State budget.
June 15, 2026
Request to the Governor
The County asks the Governor for full repayment and a permanent fix.
August 2026
Fact sheet released
A two-page summary of the shortfall and what it means for local services.