San Mateo County has achieved a record in property tax revenue, collecting a total of $4.1 billion for the fiscal year 2024-25. This marks a significant increase of approximately 6 percent, translating to an additional $238 million for local governments. This revenue is critical for maintaining essential services, including education, municipal operations, and public amenities across the county.
Revenue Breakdown and Impact
The total property tax collections rose from $3.9 billion in the previous fiscal year. According to a report covered by SFGATE, the increase reflects a broader trend in the county’s financial health, as detailed in the latest breakdown from the county controller. The county controller, Juan Raigoza, emphasized the importance of transparency, stating, “It’s important that we provide taxpayers and residents visibility into the local tax dollars they pay and where those local dollars go.”
The distribution of the property tax revenue is as follows: approximately 51 percent is allocated to school districts, around 25 percent goes to the county itself, 16 percent is directed to cities, 7 percent to special districts, and 1 percent to successor agencies of former redevelopment projects.
The primary source of this revenue is the 1 percent general property tax, which alone contributed about $3.3 billion. Additional sources include special charges, which added approximately $438 million, and debt-service levies, which contributed around $399 million. Despite the growth, this year’s increase of 6 percent is a slowdown compared to last year’s 8 percent rise.
Challenges Ahead: The VLFAA Shortfall
While revenue is on the rise, the controller’s report also highlights a significant challenge: the Vehicle License Fee Adjustment Amount (VLFAA). San Mateo County has identified a shortfall of $119 million for the 2024-25 fiscal year, with projections indicating a gap of $163 million for 2025-26. Additionally, there remains about $38 million owed from the state for the 2023-24 period. These missing funds complicate budget planning for local governments, as VLFAA payments were intended to compensate for revenue lost when the state transitioned vehicle license fees into property tax revenue.
The assessed value of properties in San Mateo County has also seen growth, reaching approximately $325.5 billion for the 2024-25 assessment year, a 5.75 percent increase from the previous year. This growth is attributed to consistent demand for housing and ongoing commercial development, particularly in the life sciences sector. While the expanding tax base has bolstered the property tax revenue, higher mortgage rates and evolving needs in commercial real estate have tempered more rapid increases.
For residents, the increase in property tax revenue signals enhanced funding for schools, which benefit from over half of the general tax revenue. The remaining funds are vital for essential services such as public safety, parks, libraries, and other community needs. However, the challenges posed by the VLFAA shortfall and slower growth in assessed property values suggest that long-term financial planning will remain complex for city and county officials in San Mateo County.
