Including federal relief, state spending increased by 27.1% in 2019–21 and 28.7% in 2021–23

By: Emily Makings
10:03 am
May 3, 2022

The increase in appropriations from funds subject to the outlook (NGFO) in the 2022 supplemental operating budget is historically large. But that doesn’t include the influx of federal relief funds related to the pandemic.

On top of the $64.125 billion in NGFO appropriations for 2021–23, federal relief appropriations for 2021–23 came to $8.931 billion in the operating budget, $1.0 billion in the transportation budget, and $624.3 million in the capital budget.

There was also substantial spending of federal relief in 2019–21. Actual 2019–21 spending figures are now available from the state. It is important to note that a final accounting of all the federal relief is years down the road. The various pots of federal money have different use-by dates, and the state has some flexibility to switch around the source of funds for various programs in order to make the best use of federal relief. Additionally, various pots of federal relief are grouped together in the state’s historical fiscal data, which makes it a bit tricky to compare the history to the initial appropriations. I hope we will be able to be more precise when the state’s single audit report for 2021 is published this summer.

That said, it looks like overall actual operating spending of federal relief for 2019–21 totaled $5.179 billion. Chart 1 shows historical operating spending (through 2019–21) and 2021–23 operating budget appropriations (including the 2022 supplemental) for the NGFO and federal relief. In 2019–21, NGFO plus federal relief spending increased by 27.1% over 2017–19. For 2021–23, NGFO plus federal relief operating budget appropriations are 28.7% higher than 2019–21.

As Chart 1 shows, there’s an important difference between the Great Recession and the pandemic recession. The green dashed segments in 2007–09 and 2019–21 indicate how high NGFO appropriations were before actions were taken to reduce spending. In 2007–09, federal stimulus dollars offset much of the reduction to state appropriations. Then, in 2009–11, state spending actually declined from the previous biennium, but federal stimulus funds allowed spending to be sustained.

In contrast, NGFO spending didn’t decline from biennium to biennium in either 2019–21 or 2021–23. Federal relief more than offset the decrease in NGFO spending (compared to the appropriation high point) in 2019–21 and it is purely additive in 2021–23.

Finally, one of the more flexible pots of federal relief is the coronavirus relief fund (CRF, part of the CARES Act). This money must be used for costs incurred by Dec. 31, 2021. The state of Washington received $2.167 billion from the CRF. In 2019–21, the state spent $1.828 billion of it. For 2021–23, the state has appropriated $320.5 million. (These amounts are included in the federal relief in Chart 1.)

Chart 2 looks at how actual CRF spending for 2019–21 differed from the 2021 supplemental appropriations (or allocations via the unanticipated receipts process) of the CRF. Notably, less than expected was spent on items in the Department of Social and Health Services and the Department of Health and more than expected was spent on Department of Commerce items. (The allocations to the Department of Commerce included programs like business and rental assistance and transfers to local governments.)

Categories: Budget.
Tags: 2022supp , CARES Act , COVID-19