Seattle (August 1, 2020) – With upcoming Congressional action and revenue forecasts impacting 2020 and 2021, Mayor Jenny A. Durkan vetoed City Council’s plan to deplete the City’s emergency fund and rainy day fund. In the last two budgets, Mayor Durkan has worked to build our reserves for economic downturns and emergencies. The City entered the COVID-19 pandemic with total General Fund reserves of $127.5 million. Because of our current economic crisis, $29 million of this was needed to close the approximate $300 million dollar hole created in this year’s 2020 budget. However, Council has proposed spending 90 percent of the reserves (an additional $86 million) on new spending, and the remaining 10 percent (approximately $13 million) in other new spending in the upcoming weeks. You can read Mayor Durkan’s full letter to Council, where she pledged to work with Council to identify specific resources for unmet needs proposed in Council’s plan.
“We are in the middle of an unprecedented public health and economic emergency. It is irresponsible to spend the entirety of our rainy day and emergency funds in the first few months of what is likely a multi-year crisis. If 2020 is any indication, no one can responsibly project that Seattle will not have additional emergencies this year and next. Already this year, in addition to the health and economic crisis, we have seen a significant unplanned infrastructure emergency with the closure of the West Seattle Bridge,” said Mayor Durkan.
In mid-August, the City Budget Office will have projections for the next City revenue forecast, which will include actual revenue from the first six months of the year and an assessment of how much economic and financial uncertainty remains in both 2020 and 2021. In addition, the Mayor has been working with the state and Congressional delegation on additional resources and the upcoming coronavirus relief bill. This will help us better understand unmet needs for our residents and whether the City’s budget hole has grown or changed from current projections.
“I do fully expect that the City will need to use the vast majority of its emergency funds as it relates to COVID-19 and the economic crisis over the next few years. While we all support the use of the funds for COVID-19 relief, drawing down 90 percent of our emergency reserves now without a better understanding of our financial situation for the remainder of this year, 2021, and beyond is unwise. It also will ultimately hurt the very people we need to serve the most,” continued Mayor Durkan. “City Council’s budget process cannot continue to be spending or cutting tens of millions of dollars without concrete plans. I remain committed to working with Council to identify specific resources for some of the newly proposed programs, where we know there is great unmet need.”
With Council’s collaboration, Mayor Durkan has worked to surge $233 million in COVID-19 programs and relief to residents. The City shifted tens of millions of financial resources and staff to address the crisis and community needs. The 2020 budget rebalancing package submitted to Council funded expanded services to those experiencing homelessness, rental assistance, grocery vouchers, meal assistance, emergency child care for essential workers, and small business assistance. This is in addition to the relief being provided to Seattle residents, workers and businesses by other organizations, like All in Seattle, Schultz Family Foundation and the Seattle Foundation’s COVID-19 Response Fund to name a few. To date, those programs have raised at least $108 million.