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San Mateo and two rural counties seek $118 million VLF backfill; administration says no statutory obligation
Summary
San Mateo County, Alpine and Mono requested $118 million to cover an in-lieu vehicle license fee shortfall caused by an outdated 2004 VLF backfill structure; Department of Finance says there is no statutory requirement and the May Revision does not include the funds.
San Mateo County and two small rural counties asked Assembly Budget Subcommittee 5 to include an in‑lieu vehicle license fee (VLF) backfill payment in the 2025–26 budget to cover a structural shortfall in the post‑2004 VLF swap arrangement.
Assemblymember Diane Papan described how the 2004 VLF restructure replaced local VLF receipts with an in‑lieu property tax mechanism intended to hold local governments harmless. Because San Mateo has high property values and low student enrollment, Papan said the…
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