VLF Impact on SSF
South City Deserves Its Fair Share
Protect our services. Demand fair funding.
$10.6 Million in Annual Funding for South San Francisco is at Risk
South San Francisco is not receiving the same Vehicle License Fee replacement funding from the State that is provided to most communities across California. To date, the City has not received $13.2 million in VLF funding.
This is funding that helps our city provide the services residents rely on every day. Without a permanent solution, the shortfall will continue to grow and could affect South San Francisco’s ability to maintain services now and in the future.
What Is VLF Funding?
In 2004, the State of California reduced local cities and counties’ share of vehicle license fee. In exchange, the State committed to replacing the revenue that cities and counties would lose.
That replacement funding is known as Property Tax In-Lieu of Vehicle License Fee funding (VLF funding).
Most California communities continue to receive their full funding. However, an outdated funding mechanism has left San Mateo County and all 20 of its cities, including South San Francisco, without the full amount they are owed.
What Does This Mean for South City Residents?
To date, South San Francisco has not received approximately $13.2 million in VLF funding for three fiscal years (2023-24, 2024-25, and 2025-26). If the issue is not permanently solved, the amount of missing revenue could continue to grow each year.
$13.2 million helps support services and investments such as:
- Police, fire, and emergency response
- Street, sidewalk, and pothole repairs
- Parks and Recreation programs
- Libraries and literacy programs
- Services for children, families, and older adults such as childcare and adult daycare programs
- Affordable housing and homelessness prevention
These funds are not tied to just one program or department. They support the City’s General Fund, which pays for many of the essential services our community uses every day.
Why Is This Happening?
The issue is not the result of a decision made by South San Francisco. The State’s existing payment system no longer provides enough funding to fulfill its commitment to San Mateo County and its cities. Although the State has addressed similar shortfalls in the past, there is currently no permanent solution.
Fifty-five of California’s 58 counties and 463 cities receive this funding without interruption. South San Francisco and the rest of San Mateo County deserve the same treatment.
This is a Countywide Issue
South San Francisco is not alone. San Mateo County and its 20 cities experienced cumulative shortfalls of approximately $226 million in Fiscal Year 2025-26, $42 million in Fiscal Year 2024–25, and $38 million for Fiscal Year 2023-24.
Cumulatively, the County and its cities are seeking more than $300 million in unpaid funding and a permanent solution that prevents the shortfall from continuing.
What is the City Doing to Address This?
South San Francisco is working alongside San Mateo County and its cities to:
- Pursue the funding already owed to our communities
- Advocate for funding through the State budget
- Seek a permanent legislative solution
- Educate residents and state leaders about what is at stake
Our goal is straightforward: South San Francisco residents should receive the same funding provided to communities throughout California.
Stay Informed and Take Action
This issue could affect South City services for years to come. Sign up to receive updates, learn about upcoming community meetings, and find out how you can help support fair funding for South San Francisco.
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Frequently Asked Questions
Is this a new tax?
No. The City is seeking funding the State previously committed to provide, not proposing a new local tax.
Is this related to how much I pay to register my vehicle?
The issue originates from a statewide change made in 2004, when California reduced vehicle license fees and committed to replacing the revenue cities and counties lost. It does not mean South San Francisco is proposing a new vehicle fee.
How much funding is South San Francisco missing?
South San Francisco’s VLF funding shortfall was approximately $10.6 million for Fiscal Year 2024–25. Without a permanent solution, additional funding could be at risk in future years.
Will services be cut?
The continued loss of funding places increasing pressure on the City’s General Fund and its ability to maintain services over time. The City is working to recover the funding and secure a permanent solution before the shortfall grows further and impacts our services.
Why can’t the City use other funding?
Many City revenues are legally restricted to specific purposes. VLF replacement funding supports the General Fund, which pays for a broad range of essential community services. Replacing millions of dollars in ongoing General Fund revenue would require difficult budget decisions.
What can residents do now?
Start by learning about the issue, and signing up for updates. The City will share additional information, community meeting opportunities, and future ways to participate as this effort moves forward.
Learn More
Visit Fair Funding for San Mateo County’s Communities to learn more about the countywide funding shortfall, what is at stake, and the coordinated effort to secure a permanent solution.