Jeanne Kohl-Welles
Jeanne Kohl-Welles

With the economy reeling because of COVID-19, members of the King County Council now face a difficult challenge with the 2021-22 biennial budget.

Tuesday, King County Executive Dow Constantine submitted the budget to the King County Council, which should be approved in November.

At a virtual town hall session Sept. 19 hosted by District 4 County Councilmember Jeanne Kohl-Welles, the budget outlook presented a somber outlook.

A big challenge facing council members is how the county will continue to provide COVID-19 assistance for those in need without additional funding from the federal government. Federal mandates for the Coronavirus Aid, Relief and Economic Security Act forbid the county from using that money to backfill other areas of the budget, and requires counties to spend those funds before the end of the year.

“So we’re trying to deal with federal restrictions and also get the funding out to individuals and organizations in need as quickly as possible,” Kohl-Welles said.

While details of the budget Constantine submitted to the council were not available before press time, Kohl-Welles warned at the town hall the county would not be making many additions to the budget in the next two years because of the economic downturn.

King County Budget Director Dwight Dively, one of the speakers at the event, explained how the county would not be able to maintain current COVID-19 assistance in addition to addressing revenue consequences of the recession.

“I want to always make sure that people understand that the county, as is true for all counties, does not have the flexibility in raising revenue as the state government has and the cities have,” Dively said, adding the county is limited in how money can be spent, as well.

In a slide, Dively showed how King County was affected by the economic downturn caused by COVID-19. From March through August, King County received 458,474 new unemployment claims, according to a county spreadsheet. In July, the county’s unemployment rate was 8.3 percent, while it was 10.2 percent statewide.

“I just want to make a note that in the great recession, we never got to the levels of unemployment as we did in the COVID recession,” Dively said.

Reflecting the current economic downturn, Dively reported that, from the March 1 forecast, sales tax is down almost 16 percent for this year and is expected to be down almost 15 percent in 2021 and 12.4 percent in 2022.

Dively said that the services and programs that depend on the county’s sales tax will be impacted the greatest. That includes King County Metro, which receives more that half of its budget from the sales tax.

Programs and services that have received a great deal of money from the federal government are also in danger.

“The key thing to understand is that almost all of the federal money that we have received expires at the end of this year,” Dively said, adding Congress has made no progress on passing a new emergency stimulus bill. “And so, if there is no new federal money, no new state money, the county’s ability to continue to respond to COVID is going to be extraordinarily reduced on Jan. 1.”

He said he believes the county will be able to continue to fund efforts by King County-Seattle Public Health to operate testing sites and conduct contact tracing. Funding allocated to the Department of Community and Human Services to establish and run its isolation and quarantine centers and de-intensification of homeless shelters will be in jeopardy.

“Without additional federal support, we are not going to be able to continue to do all the things that we are doing to respond to COVID,” Dively said.

He assured residents who rely on King County Metro and mass transit that, despite the loss of sales tax and fare revenue, no reductions in access to services are expected in the budget.

Dively also warned that artists and cultural workers, who have already been greatly impacted, should not expect much help in the upcoming budget. He said the vast majority of funding is either through federal money or the 4Culture public development authority, which supports arts and cultural activities. A portion of the lodging tax revenue collected by hotels and motels was also set to benefit arts and culture, but with the hotel industry hit the hardest by the recession, very few funds will be available to benefit arts. Dively said the hotel industry experienced a 90 percent drop in business from the previous year for awhile, and that number is “still way down.”

Also at risk is the Washington State Convention Center expansion. Dively said, unless approximately $300 million comes through, either from the federal government or other funding sources, the project will likely have to be shut down and mothballed.

“So that is a big challenge we are facing as a region is whether we can complete the expansion of the convention center,” Dively said.

On the bright side, however, Dively said some areas of the economy are doing well.  He said the mail-order and internet delivery business has seen an uptick in business as residents are relying more on non-store retailers to mail goods to homes. As well, Dively mentioned that people with jobs who are working from home are doing a lot of home improvement projects, and building material sales and remodeling jobs are up.

“So I think that was totally unexpected,” he said.

Businesses that specialize in the kind of food residents used to get in restaurants are also benefitting.

As an example, Dively said his family patronizes a local butcher in Queen Anne, which has seen an increase in business since customers have been cooking at home, as opposed to visiting restaurants.

“So, there are some places in the economy that have done well despite the recession,” Dively said.

Kohl-Welles said people will have multiple opportunities to comment on the 2021-22 budget in the coming weeks, including three daytime hearings and at least one evening hearing.

To view the entire virtual town hall or to receive updates, people can visit Kohl-Welles Facebook page, www.facebook.com/cmkohlwelles. People can also email Kohl-Welles at jeanne.kohl-welles@kingcounty.gov.