San Mateo County in a lawsuit filed this week claims the State of California “shorted” it and its 20 cities $38 million in funds distributed annually under a decades-old deal involving vehicle-license fees that is now enshrined in law.

California’s unprecedented “raid” on the funding stream deprived San Mateo County and cities from East Palo Alto to Daly City of “critical” funds for serving residents, while giving a “windfall” to the state, the lawsuit filed Monday in San Francisco County Superior Court claimed.

The lawsuit accuses California of breaking a legal requirement to provide the funding, and seeks a court order mandating payment of the $38 million, plus unspecified damages.

Named as defendants are the State of California along with state Finance Department Director Joe Stephen

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