Last Friday, Seattle Mayor Durkan vetoed a bill that would appropriate $85.8 million from the city’s emergency and revenue stabilization funds. The City Council approved the appropriations to pay for new 2020 spending related to “the economic impacts caused by the COVID-19 epidemic.”

The appropriations in the bill include:

• $19.5 million for “existing homelessness prevention programs and rental assistance programs,”
• $10.8 million for “shelter de-intensification activities and housing or shelter options for unsheltered homeless individuals and families in non-congregate settings,”
• $2.4 million for “ongoing service and operation costs of shelter providers,”
• $2.4 million for “ongoing service and operation costs of nonprofit affordable housing providers,”
• $17.1 million for “direct financial assistance to Seattle’s low-income immigrant and refugee workers and households who have experienced the economic impacts caused by the COVID-19 crisis,”
• $14.1 million in financial assistance for small business owners or operators and nonprofit organizations,
• $13.6 million for the Emergency Grocery Voucher program, and
• $3.6 million in financial assistance for child care providers.

The City Council expects collections from the recently passed payroll tax will be sufficient to repay the funds in 2021.

The mayor’s veto message notes, “This bill, together with other budget actions Council is considering, wipes out all of the City’s Rainy Day and Emergency funds, leaving us with nothing to weather future storms or help close next year’s even bigger deficit.”

She adds, “While we all support the use of the funds for COVID-19 relief, drawing down 90% of our emergency reserves now without a better understanding of our financial situation for the remainder of this year, 2021, and beyond is unwise.” The city will have its next revenue forecast later this month, and there’s still the possibility of more federal funding. (Moreover, as the mayor notes, the city must also deal with the West Seattle Bridge. The Seattle Times reports that fixes will cost “between $160 million and $225 million.”)

Finally, she makes the point that the revenue estimate for the payroll tax is not a sure thing, so the revenues might not be sufficient to replenish the emergency funds. The tax could face legal challenges, and given the state of the economy, there just may not be as much payroll to tax.

The bill was passed unanimously by the Council, and the Seattle Times reports that Council could act soon to override the veto.