Today Gov. Inslee signed three bills related to federal relief funds:

• SHB 1095 specifies that federal and state grants for businesses that address “the impacts of conditions giving rise to” official emergencies are not subject to the business and occupation tax, the public utility tax, or the retail sales and use tax. (For example, businesses will not owe state taxes on forgiven paycheck protection program loans.)
• HB 1367 funds temporary COVID-19 rate enhancements for long-term care providers using $164.3 million from the budget stabilization account (BSA, or the rainy day fund) and $239.4 million from the enhanced federal Medicaid match.
• HB 1368 appropriates federal relief dollars for various purposes, including business assistance grants, rental assistance, public schools, COVID-19 testing, and other pandemic response. $2.185 billion is appropriated from the enhanced federal Medicaid match, the state’s share of the coronavirus relief fund (CRF), the Dec. 2020 federal relief bill, and other federal funds.

Meanwhile, earlier this month, the Office of Financial Management (OFM) allocated state funds from the disaster response account (DRA):

• $43.5 million for eviction rental assistance
• $43.5 million for business assistance grants
• $2.5 million for behavioral health provider payments
• $2.0 million for grants to nursing care facilities operating as a public health district
• $500,000 for the McKay Healthcare and Rehabilitation Center in Soap Lake

These DRA allocations total $92.0 million. According to OFM, their funding originated in the 2020 appropriation from the BSA to the DRA. As I noted last year, Gov. Inslee used the CRF to replace $97.2 million of funding for COVID response that had come from that BSA appropriation. Under the terms of the 2020 legislation, any unobligated funding at the end of the biennium must be returned to the BSA. With the new DRA allocations, it looks like that won’t happen.

But, even without that backfill and accounting for the HB 1367 appropriation from the BSA, the BSA balance is still historically high. (Note that the $25 million that was originally transferred from the BSA in 2020 to the COVID-19 unemployment account and that was replaced with CRF dollars has been returned to the BSA, according to the Economic and Revenue Forecast Council.)