On Feb. 29, Gov. Inslee declared a state of emergency in response to Washington’s coronavirus outbreak. On March 2, the Department of Health (DOH) gave a presentation to the Senate Ways and Means Committee in which DOH estimated that the public health system and the Department of Social and Health Services (DSHS) could need $100 million to respond to the outbreak.

The Senate-passed supplemental operating budget includes $10.0 million from the general fund–state for coronavirus response. Of this, $1.4 million is for DOH and $8.6 million is for “incident management activities of local health jurisdictions.” The House-passed supplemental operating budget includes $5.0 million for coronavirus response from the disaster response account.

Yesterday, the House unanimously passed HB 2965. The bill would appropriate $100.0 million from the budget stabilization account (BSA, or rainy day fund) to address the outbreak. The funds would be appropriated to the disaster response account and then to the Office of Financial Management (OFM), “solely for allotment to state agencies and for distribution to local governments and federally recognized tribes for response to the novel coronavirus.” The bill would require OFM to provide monthly spending updates to the Legislature and it specifies that the funds could not be used to supplant existing funds “for services and activities that will assist in the response to the novel coronavirus.” Additionally, before getting this funding, “agencies and local governments must demonstrate maximum use of available federal funds.” If any of the $100.0 million is unobligated at the end of the 2019–21 biennium, it would have to be transferred back to the BSA.

The bill also states that DSHS would be “authorized to determine nursing facility payments to adequately resource facilities responding to any state of emergency declared by the governor including the 2019 novel coronavirus outbreak.”

A similar bill, SB 6696, has been introduced in the Senate.

The state certainly has an important role in funding the response to public health emergencies like this. And such emergencies can be appropriate uses of the rainy day fund. However, both the House- and Senate-passed supplemental operating budgets would increase appropriations by over $1 billion. If either budget is enacted, 2019–21 appropriations would increase by about 21 percent over 2017–19 spending.

State coffers are flush. Surely the Legislature could respond to this need without tapping the BSA. As we have written, a recession will occur sooner or later, so it would behoove the Legislature to moderate its spending on non-emergency items in this supplemental budget year and avoid making appropriations from the BSA. The BSA will be needed in the event of a recession, and the coronavirus outbreak could actually make a recession more likely in the near term as economic uncertainty increases (see, for example, the stock market’s response to the outbreak and the Fed’s emergency rate cut).