State Democrats unveil $2.2 billion COVID-19 relief proposal
Democrats in the Washington state legislature unveiled a COVID-19 relief package late Friday afternoon that would put nearly $2.2 billion in federal funding toward COVID-19 response and relief for renters, small businesses, school districts, child care providers, and others feeling the weight of the pandemic and economic restrictions meant to curb it.
“This is just the first step in our process this year,” Rep. Timm Ormsby, D-Spokane and chair of the Appropriations Committee, said in a prepared statement.
“In the coming months, House Democrats will have bills, a supplemental budget, and an operating budget for the next biennium that continues to invest in public health, equitably addresses needs across the state in struggling communities, and helps families and small businesses get through this next phase of the pandemic.”
The Democrats’ proposals are expected to have public hearings next week. Sen. Christine Rolfes, D-Bainbridge and chair of the Senate Ways & Means Committee, said she hopes the package will be through the legislature and on the governor’s desk within a few weeks.
A Republican in the state House who has introduced his own, $4 billion relief package says the Democrats’ plan doesn’t go far enough.
What’s in the Democrats’ package
The package was negotiated between the House and Senate Democrats, Rolfes said, but included input from Gov. Jay Inslee’s Office and lawmakers on the other side of the aisle. Inslee had requested $100 million in rental assistance and $100 million in business grants early in the session.
“We all tend to have the same priorities right now because the problems are so obvious,” Rolfes said. There was limited flexibility in where the money could go, she said, but legislators included in the proposals some guidance to the state agencies that will work out the details.
The proposal allocates more than $668 million to school districts via the Elementary and Secondary School Emergency Relief fund within the Office of the Superintendent of Public Instruction (OSPI). That funding will go to districts based on a federal formula tied to how many low-income families are in a district, Rolfes confirmed.
Guidance includes requirements that school districts review and update their reopening plans for the 2020-21 school year and submit them to OSPI by March 1. It also requires them to submit an “academic and student well-being recovery plan” by June.
It puts $618 million into a “COVID-19 public health response account” that the Department of Health (DOH) can tap into only to pay for COVID-19 response, funding expenses such as testing, case investigation and contact tracing, and data collection and analysis. Of that, $68 million is allocated specifically for vaccine administration and distribution.
Lawmakers ask that DOH focus on “identifying persons for vaccination, prioritizing hard-to-reach communities, making the vaccine accessible, and providing support to schools for safe reopening,” and told the department to report to the legislature monthly on its COVID-19 response.
For business relief, the plan proposes $240 million more in Working Washington small business grants that are administered by the state Department of Commerce. It also includes $50 million to the Department of Children, Youth, and Families to provide financial support to child care providers, prioritizing racial equity and those in “child care deserts” and “communities of concern.”
The bill allocates $365 million to the Department of Commerce for rental assistance and housing. Of that, $325 million goes to a rental and utility assistance program that distributes grants to local housing providers and $30 million goes to an eviction rental assistance program.
“The governor’s eviction moratorium is a stopgap, one we desperately needed, but the next step is helping thousands of families get caught up on their past due rent,” said Rep. Nicole Macri, D-Seattle, in a prepared statement. “Step one in our plan helps the people who need that assistance and more. Helping people pay the rent provides peace of mind during a time when the ability to stay at home is essential in combating the virus.”
Nearly $26.4 million in the proposal goes toward block grants for hunger relief organizations via the Department of Agriculture, and $4.7 million would increase the benefit under the food assistance program within the Department of Social and Health Services.
The Washington Immigrant Relief Fund gets $65 million in the proposal, and $5 million goes toward relief grants for undocumented students.
Though not included in this proposal, Democrats have named a handful of other bills as priorities for early action this session.
Those include bills that would provide relief from unemployment insurance tax hikes, waive liquor license fees for businesses impacted by closures, and a Business & Occupation tax exemption for money that businesses have received through the federal Paycheck Protection Program.
Where the money comes from
Nearly $1.8 billion in the package comes from the $900 billion pandemic relief bill former President Donald Trump signed into law late last year. The rest can be traced back to the original federal relief package, the CARES Act.
Money from the CARES Act had a spending deadline looming at the end of 2020. As that day neared, the state spent about $400 million on increased vendor rates within the Department of Social and Health Services (DSHS).
That deadline was extended, and the plan reclaims that roughly $400 million and spends it elsewhere. Instead, it uses about $164 million from the state’s “rainy-day fund” to pay for those increased rates, and Medicaid matching funds make up for the difference.
For the Democrats, the move results in a budget bill that doesn’t open up the rainy-day fund, which Rolfes predicted would prompt legislators to want to add more spending to it. Tapping that fund will be part of conversations around the operating budget for next biennium, given that Gov. Jay Inslee’s proposal includes it.
Not tapping the rainy-day fund is a way of “imposing discipline on ourselves,” Rolfes said. And, there’s more flexibility in how federal money can be used.
Republican Rep. Drew Stokesbary, R-Auburn and ranking member of the Appropriations Committee, said his $4 billion plan includes the same maneuver. However, his plan takes a total of $2.1 billion from the rainy-day fund.
What’s in Republicans’ bigger plan
While the two plans reflect the same priorities, Stokesbary said he doesn’t think the Democrats’ goes far enough — that not dipping into the rainy-day fund now is “a mistake.”
“I think that the need out there is significant and it’s urgent,” he said, calling the Democrats’ plan “timid” and “a continuation of the status quo.”
One of the biggest examples of what he sees as shared priorities that only his proposal addresses is funding the Working Families Tax Credit this year, which is aimed at low-income families. The governor has named funding that credit as a priority.
Stokesbary’s plan also includes $300 million to provide stipends per child eligible for free and reduced-price lunch and to help parents offset new costs and lost wages due to remote learning, as well as $500 million for learning catch-up programs.
And, finally, he thinks action on unemployment insurance should be addressed more boldly than what Democrats have proposed. He said the Senate’s separate bill is a good start, but he thinks more needs to be done to shore up the balance of the unemployment trust fund.
Democrats hold majorities in both chambers of the Legislature. Asked to respond to the criticism that the bill was timid, Rolfes said, “If it’s timid, he can help us lobby Congress for more money. It’s practical, it’s emergency funds and we can do it quickly.”
More federal relief is anticipated, and money can be appropriated quickly during session if needed, she said.
“This is making sure that the money the federal government sends us is deployed now instead of tied up in political debate,” she said.
This story was originally published January 22, 2021 at 6:32 PM with the headline "State Democrats unveil $2.2 billion COVID-19 relief proposal."
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