The Governor’s proposed supplemental budgets for the 2021-23 biennium were released on December 16. The budgets reflect the state’s continued economic growth in the wake of the pandemic and incorporate several city priorities. The proposed operating budget is $61.8 billion, which includes new federal funding to several new programs and priorities, as well as increased state revenue projections from the state’s continued economic growth above last year’s revenue forecast.

The Governor’s policy initiatives focus on several themes of crises that need to be addressed in the next year: homelessness, salmon, climate, and the ongoing effects of the COVID-19 pandemic. The Governor also signed an executive order establishing a subcabinet on poverty in the Department of Social and Health Services to make recommendations on service gaps and allocated $248 million to poverty reduction. The proposal transfers an additional $600 million into the state’s “Rainy Day” fund in addition to the statutorily required $574 million.

Overall, the Governor’s budget includes several key funding priorities for cities, including continued investments in infrastructure, assistance for utility bill arrearages, affordable housing, and homelessness response. However, there are also several areas of concern, including support for a statewide preemption of local authority on housing density, lack of new investment in local culvert replacement, no additional funding for the Public Works Assistance Account, and no direct assistance to cities for implementation of the State v. Blake decision.

Notably, the Governor’s budget calls for significant transfers from the General Fund to the Multimodal Transportation Account and to the Puget Ferry Operations account addressing ongoing concerns with ferries and funding for existing transportation projects. Additional investments in the Safe Routes to Schools grant, Bicycle and Pedestrian Safety grant, and in electric vehicle infrastructure were also proposed. However, the budget does not yet incorporate the federal transportation funding that will be provided to Washington from the federal infrastructure bill. Similarly, there is no proposal for additional funding to assist with local transportation preservation and maintenance needs.

For more details on the impact on cities in the Governor’s proposed budgets, see AWC’s budget matrix, which includes an overview of impacts on cities.

Housing and land use planning

• $100 million to produce housing for the state’s most vulnerable populations, including low income and those needing permanent supportive services.
• $19.3 million to fund Growth Management Act planning requirements, including HB 1220 (2021) and legislation this session, such as HB 1099 (climate) and the Governor’s request legislation on a missing middle housing mandate.

Cities support the significant investment in housing production for those most in need. However, AWC believes the Governor’s proposed one-size-fits-all approach to residential zoning in the state is misguided, will not achieve greater housing access or affordability in our communities, and fails to respect the constitutional authority of local elected decision-makers. Worse, it will divert attention and resources from what will result in greater housing access and affordability: locally tailored solutions and greater investment to build more housing. AWC looks forward to working with the administration to achieve the goals we both share—housing units being built rather than just authorized, and affordability created, not just hoped for.

Cities and AWC have been expressing concerns about the proposal to preempt local zoning authority regarding density in areas zoned for single-family housing. This week AWC sent a letter to the Governor outlining those concerns and expressing our desire to engage in a conversation that focuses on incentives and assistance to cities instead of mandates.

Utility assistance

• $100 million for public and private utilities to provide assistance for low-income customers to address utility payment arrearages accrued during the pandemic.

Homelessness

• $815 million for sheltering programs to house those experiencing homelessness:
  • $334.7 million for rapid housing acquisition
  • $100 million to continue enhanced sheltering grant program
  • $50.9 million to address homeless encampments on WSDOT-owned rights-of-way in coordination with local governments, including $40.6 million for grants for right-of-way encampment response outreach and sheltering in the operating budget

Addressing the backlog in basic law enforcement training

• $8.4 million to fund additional classes at the Criminal Justice Training Commission to address the current training backlog. This funding will provide a total of 23 additional BLEA classes in 2022 and 2023.

Some city policy issues that were not addressed include:

• Restoring full funding for the Public Works Assistance Account
  While key programs like the Drinking Water Assistance account and the Water Pollution Revolving Account received critical new funding, the Public Works Assistance Account remains underfunded with the continued diversion of its traditional revenue sources. The Public Works Assistance Account is a crucial funding source in our efforts to provide the necessary infrastructure for our communities. Cities appreciated the investment made in the budget last session, but applications for funding still far outpace the monies available. Cities ask that the additional federal infrastructure funds as well as new state revenue be used to fully fund the program and restore diverted revenues now instead of waiting until 2023.
• Addressing the city impact of State v. Blake decision
  The Governor’s proposal includes no new funding related to Blake for cities. Additional funds to offset costs for municipal and district courts are necessary to create therapeutic courts to address the Blake decision. In 2021, the Administrative Office of the Courts received over $9.4 million in grant requests from local government but could only fund less than half. No additional funds were provided for 2022 or 2023.
• Fish passage
  While the Governor’s budget does include $360,000 to complete a statewide prioritization of fish passage barriers in collaboration with regional salmon recovery organizations, the budget does not fund additional projects using federal infrastructure funding. Instead, that funding will be distributed by means of a competitive process.

The Governor’s proposed supplemental budget will go to the Legislature for consideration during the 2022 session. The Legislature is then tasked with developing and adopting the final supplemental budget changes before they adjourn the session.

AWC encourages city officials to talk to your legislators about these supplemental budget changes and ask them to support city funding priorities.