The San Mateo County Board of Supervisors approved Tuesday an update to the county’s 2025 budget, ensuring money is available for essential services without cuts, despite a possible federal funding freeze put in place by the Trump administration.
While the county did not revise budget figures, it presented an overview of its fiscal health, highlighting that it has maintained stability through careful financial planning, including leveraging strong property and sales tax revenues.
“Our mid-year update reveals that San Mateo County continues to have sufficient revenue to support essential health and social services, which are central to our mission,” said Board President David Canepa. “We are prepared to navigate potential financial challenges with robust property and sales tax projections and careful financial management.”
As part of the budget update, supervisors unanimously approved a resolution authorizing County Executive Mike Callagy to increase payments to service providers by up to 5% from Feb. 1 to June 30 to help cover rising salary costs.
The measure ensures continued service delivery while addressing inflationary pressures on local organizations, the county said. These increases apply to specific contracts funded by Measure K or the general budget that already reimburse salary expenses, with total additional funding capped at $2 million.
No major changes were made to the overall $4.2 billion budget, originally passed last year. The majority of funding continues to support public safety, social services, and health programs, including mental health care, job training, early childhood education, food security, and efforts to combat homelessness.
“While the County continues to offer high-quality programs and services, it faces financial risks ahead,” San Mateo County said in a press release. “Local economic shifts, along with uncertainty around state and federal funding, create challenges for the future.”
President Donald Trump’s federal funding freeze order has sent shockwaves throughout the country, jeopardizing funds for crucial social and health services.
While neighboring Santa Clara County receives at least 30% of its funding from the federal government, San Mateo County’s reliance on federal money is much less. Callagy said in a text message that at least $604 million, or about 14.4% of its total budget, could be impacted by the freeze.
Callagy echoed Canepa, assuring the public that existing funds are sufficient to sustain programs despite a potential freeze on federal funding.
“However, the county is not immune to the pressures of potential rising demand for services and uncertain funding streams to meet that demand,” Callagy said.
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San Mateo County, however, continues to face economic challenges, including rising inflation, slower consumer spending, limited housing stock, high commercial vacancy rates, and a slowdown in new housing construction. Due to these factors, there is a need to prepare for the potential volatility of federal government funding, county officials said.
“Federal funding priorities remain in flux, creating uncertainty for local leaders and nonprofit organizations that depend on government grants to serve the community,” the county said in a statement.
“The Board of Supervisors is committed to maintaining the safety net services that are so vital to the public health and safety of our residents,” Canepa said. “We know from the challenges of the past that being careful and sensible with our taxpayer dollars is the best approach we can take to brace for any economic uncertainties.”
