Treasury releases more information on aid for state and local governments

By: Emily Makings
9:00 am
April 15, 2020

This week Treasury released more information on the $150 billion relief fund for state and local governments. Treasury confirmed that the total allocation for Washington (state and qualifying local governments) is $2.953 billion. Eligible local governments are King County, Seattle, Pierce County, Snohomish County, and Spokane County. They must apply for the funds by April 17 at 9 pm. Funds may only be used for new costs related to the public health emergency.

Treasury specified how funds will be allocated when an eligible city falls within a county. If both Seattle and King County apply for the funds, the funds will be allocated to Seattle according to its population and to King County according to its non-Seattle population. If Seattle does not apply, King County’s allocation will be based on its total population.

The table below is my estimate of how Washington’s $2.953 billion will be allocated among the jurisdictions, assuming they all apply. (If Seattle doesn’t apply, King County would get $393.1 million.) Treasury provided the data they will use for county populations, but not for cities. I’ve used population data from the Office of Financial Management for Seattle’s population to approximate their allocation.

As the Seattle Times reports, cities and counties below the 500,000 population threshold for eligibility are also incurring costs related to the outbreak:

One such city that could be affected is Kirkland, the earliest epicenter of the U.S. coronavirus outbreak and one of the Washington cities hit hardest by the pandemic.

The midsize Eastside community has already spent nearly $700,000 on the virus response, said Kirkland City Manager Kurt Triplett. He projects the city will lose $500,000 per month and incur a $6 million total loss in 2020. In Triplett’s eyes, it is critical that smaller cities receive federal funding considering the loss of sales-tax revenue and overtime costs for first responders.

The story has more examples of local government shortfalls. Further, regarding the allocation for the state government:

“We are working diligently to develop an equitable and transparent process for distributing funds to smaller local governments,” said [Gov. Inslee’s federal liaison Casey] Katims, adding that no decisions have yet been made between Inslee’s office, the Association of Washington Cities and the Washington State Association of Counties as the state awaits federal guidance.

Washington State Wire notes that Seattle’s allocation will come out of King County’s, and

As a result, according to the staffer at King County, the Council is going to be under tremendous pressure to only allocate the funds received by King County to non-Seattle areas of the county.

Yet, many of King County’s services are provided in Seattle. Seattle-King County Public Health is an inter-governmental collaborative effort, but it is by statute a county agency.

A negotiation will need to occur between the county and the city over how best to fund that $100m the staffer mentioned as a possible spend for the year, particularly when Seattle dollars are going to the City of Seattle rather than Seattle-King County Public Health.

Meanwhile, Route Fifty reports that the local shortfalls mentioned in the Seattle Times piece (and my post yesterday) are occurring nationally: “Eighty-eight percent of local leaders surveyed by the United States Conference of Mayors and the National League of Cities said they expect a budget shortfall this year due to the impact of the coronavirus pandemic on the economy.”

Categories: Budget , Categories , Economy.
Tags: CARES Act , COVID-19 , COVID-19 & the economy