Proposed $6.3B San Mateo County Two-Year Budget Preaches Caution

SAN MATEO COUNTY, CA — San Mateo County Manager Mike Callagy unveiled a $6.3 billion budget over the next two years on Wednesday that he said “reflects a need for restraint and caution” as the county attempts to emerge from the economic effects of the COVID-19 pandemic.

Under the proposal, which will be considered by the county Board of Supervisors beginning June 21 at a series of public hearings, the county would spend approximately $3.3 billion in the 2021-22 fiscal year and $2.9 billion in 2022-23. The proposed budget for next fiscal year is a decrease of $329 million from last year due to the loss of pandemic-related federal and state funds.

In the budget, Callagy recommended spending nearly a third of funds — roughly $2 billion — over the next two years on health-related services. The proposal also includes $1.4 billion each on community services and administrative and fiscal services, $993 million on criminal justice and $578 million on social services.

“This budget reflects funding and expenditures for our ongoing efforts against COVID-19, including the administration of vaccines, prevention and mitigation measures, and recovery programs to help our residents, small businesses, and community organizations build for our ‘new normal’ post COVID-19,” Callagy said.

San Mateo County saw a significant decline in Transient Occupancy Tax as a result of a drop in travel and hotel stays during the pandemic, according to Callagy, as well as sales tax at San Francisco International Airport, which is in the county.

“Though there is still much uncertainty in the fiscal outlook that requires continued caution and restraint, we are emerging from the pandemic in a stable condition,” Callagy said.

The county’s health system still faces a projected structural deficit of $23 million in the 2022-23 fiscal year, but under the new budget, the county is expected to add 26 new positions primarily in health services over the next fiscal year. No additional positions are expected in 2022-23.

Callagy credited the county’s hiring freeze at the beginning of the pandemic for helping avoid layoffs, but he recommended ending the freeze on July 1.

The proposed budget’s priorities also include providing funds for three hotels the county purchased during the pandemic to provide housing for people experiencing homelessness, distributing $16.2 million in Measure K funds toward an educational partnership program, building a new mental health facility, upgrading parks and hiring a chief equity officer.

Callagy noted that the proposed budget could look different in September after federal money is allocated.

“We must now persevere by following the guidelines and one day soon we will be able to ditch the mask, shake hands, and convene together,” Callagy said. “That day is soon, but not today. The full depth and duration of the economic impacts of this health emergency remain unknown.”

View the full proposed budget here.