Economic impact of the COVID-19 emergency hit home for cities and the state

AWC membership adopts new Statement of Policy

AWC’s Statement of Policy (SOP) is a foundational document for our advocacy work. The SOP establishes our core principles and policy positions and is updated every six years. It was last revised in 2014, which makes 2020 an update year. Per our bylaws, AWC convened a group of members to serve on the State and Federal Policy Committee and tasked them with crafting a new version of the policy. We are so grateful to those who participated and provided thoughtful insights to build a strong policy foundation.

The SOP was presented to the full membership at the Annual Business Meeting in June for ratification, where the membership voted to adopt the 2020 Statement of Policy. I encourage everyone to take a few minutes and review this important document. Particularly important are the core principles that will guide the work of AWC in advocating for all our 281 cities during the next six years. AWC’s core principles are:

• Local decision-making authority
• Equal standing for cities
• Strong Washington state partnerships
• Fiscal flexibility and sustainability
• Diversity, equity, and inclusion
• Nonpartisan analysis and decision-making

Federal CARES Act funds

As many of our members know, Washington state was a leader in deciding to share federal CARES Act funds (more formally known as COVID-19 Relief Funds or CRF) with cities and counties under 500,000 in population that did not receive a direct federal allocation. In May, the Governor allocated $297 million for cities and counties. Each city is eligible to receive up to $30 per capita for eligible expenses. The Department of Commerce is currently working to set up contracts with each city and to start the reimbursement process. If your city has yet to begin this process with Commerce, please do so immediately (AWC recently sent an Action Alert to those cities). Time is of the essence as cities only have until October 31 to submit reimbursement requests for eligible costs. What is an eligible cost? This is established by the Treasury Department, which continues to update its guidance. However, most costs associated with COVID-19 response are generally considered eligible.

In addition to the $297 million currently allocated for cities and counties, the state has set aside another $240 million that could go to local governments. AWC recently sent a letter to the Governor and legislative fiscal leaders in which we asked for the funds to be made immediately available to jurisdictions in need and to move the reimbursement deadline to December. We encourage you to let your legislators know if you believe your city will exceed its current allocation and need additional funding.

In addition to CARES Act funds distributed to cities and counties, the state recently announced distribution of another $365 million for purposes such as rent assistance, small business help, testing needs, and childcare and food assistance programs. This included $100 million in rent assistance for low-income renters and $20 million to help small businesses and local economic development organizations.

Latest revenue forecast

$8.8 billion – This is the size of the projected shortfall in the state’s budget through the next biennium (2021-23), according to the state revenue forecast issued on June 17. The forecast indicates a projected loss of $4.5 billion this biennium (ending on June 30, 2021) and a $4.3 billion loss in the 2021-2023 biennium. There is only one bright spot in the projections: cannabis sales. The next forecast is expected to be issued this September and will likely be impacted by the pace of the state’s reopening. There remains a great deal of uncertainty as to how fast any economic recovery will occur.

Special Legislative Session?

The revenue forecast spurred an increase in calls by some legislators for a special session, with the hopes of starting to address some of the budget challenges facing the state. However, it seems there is still a lack of consensus around the need for a special session, let alone the timing. There was talk of a special session in August; however, legislators just announced that they wouldn’t be back this summer. As of now, if there is a special session it may be in November, after the general election.

Regardless of the continuously moving target of a possible special legislative session, AWC wants to be prepared. For this reason we have adopted Special Session Legislative Priorities and we are working with legislators to prepare legislation that would provide some fiscal and regulatory flexibility for cities to help ease the financial impacts on their budgets. In addition to budget impacts, there is talk of legislators wanting to take action on police reforms during the potential special session.

Strong city advocacy

Whether or not a special session is “right around the corner,” it is crucial that cities continue their advocacy efforts. Talk to your legislators about what your city has experienced, specifically in terms of increased costs and lost revenue.

Messages to share with legislators:

• Talk about AWC’s Special Session Legislative Priorities (linked above);
• Brief them on your city’s emergency response efforts, including costs;
• Highlight any need for emergency financial support related to emergency response;
• Explain the impact of state-shared revenues on your city’s budget and its ability to provide services;
• Remind them that cities are the economic drivers for the state. The state benefits by supporting cities; and
• Emphasize that we are all in this together and if we partner, we will be stronger.

Looking for some tips for how you can be a strong city advocate? Watch the video above to check out these top ten tips and our most recent Advocacy Academy webinar. To view the webinar recording, you will need to register for conference (free) and log in. Finally, make use of our recently updated virtual Strong cities advocacy guide.