Governor vetoes $450 million in spending as the state’s budget outlook rapidly changes

On Friday, April 3 Governor Jay Inslee vetoed several of the Legislature’s approved spending provisions in response to the new economic reality due to COVID-19. Back in February the Legislature had great news – a strong revenue forecast. The forecast projected that the state had more than $600 million in additional revenue to use, combined with lower-than-expected expenditures from reduced caseload projections. However, the economic news has changed significantly as the negative impacts of the coronavirus disease (COVID-19) have presented themselves. The Governor’s vetoes totaled approximately $450 million in savings for the state’s general fund operating budget.

The Governor’s veto action largely leaves city funding intact; however, there are some notable exceptions.

The bad news

Review AWC’s budget matrix for a quick summary of the significant areas impacting cities. Read some of the highlighted vetoes in the three budgets below.

The Governor:

• Vetoed HB 1948 that created the Manufacturing and Warehousing Account to provide Streamlined Sales Tax mitigation funding along with the existing mitigation funding;
• Vetoed $50 million for the new Climate Resiliency Account;
• Vetoed a $7 million increase from the Local Solid Waste Financial Assistance grant program; and
• Vetoed the creation of the Road Map to Washington’s Future workgroup to make recommendations on reforming the Growth Management Act.

The good news

In good news, state-shared revenues remain intact and funding for additional Basic Law Enforcement Academy classes remains in the budget. These extra classes will help reduce wait times for cities waiting for hired police candidates to complete the required training.

Additionally, the Governor did not cut funding for a study of medication-assisted treatment (MAT) programs. Due in November, this study will provide cities and legislators with real costs for developing and implementing MAT programs in jails statewide.

• Read the Governor’s full veto message for the operating budget, SB 6168.
• Read the Governor’s full veto message for the transportation budget, HB 2322.
• The Governor did not veto any portion of the capital budget, SB 6248.

Next steps

In addition to these cuts to the supplemental budgets, it is expected that the Governor will call the Legislature into a special session later this year to address additional budget impacts of COVID-19.

Looking forward to the 2021 session, we can expect that an economic downturn will have the Legislature struggling to balance the budget. We know from the Great Recession that when faced with budget challenges, the Legislature will turn to reductions in local funding. It is crucial that you start talking with your legislators now about what cities are experiencing and what support you need from the state.

We know from the Great Recession that when faced with budget challenges, the Legislature will turn to reductions in local funding.

Messages to share with your legislators:

• Brief them on your city’s emergency response efforts, including the costs.
• Highlight any need for emergency financial support related to emergency response.
• Explain the importance of state-shared revenues to your city’s budget and its ability to provide services.
• Remind them that cities are the economic drivers for the state. By supporting cities, the state benefits.

Review our 2020 State of the Cities report to find more specific data about the benefit that cities bring to the state.