Durkan vetoes Seattle Council’s plan to spend $86 million from emergency reserves on COVID-19 relief

Mayor Jenny Durkan has vetoed a City Council plan to spend $86 million from Seattle’s emergency reserves on relief for residents and small businesses dealing with the COVID-19 crisis, calling the move “irresponsible.”

The council’s vote on the bill was unanimous, suggesting Durkan’s veto likely will be overridden.

“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,” Durkan said in a statement Saturday.

“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.”

Councilmember Teresa Mosqueda, who sponsored the spending bill, responded in an interview Saturday.

“What’s irresponsible is to take a ‘wait-and-see’ approach. If we don’t provide relief right now, what we’ll see is more people losing homes, going hungry, small businesses closing and families going without child care,” she said.

“As soon as we can, we’re going to be taking action” to override the mayor’s veto, Mosqueda added. “This is not about a political standoff. This is about how we get relief out to people right away.”

Before the pandemic, City Hall had about $128 million total in its emergency fund and rainy day fund. Durkan has proposed spending $29 million in reserves to help close a mid-year budget gap in the city’s projected revenues, and council members have indicated support for that move.

Separately, the council passed a bill last month authorizing an additional $86 million in spending from the reserves for COVID-19 relief programs — including rent assistance, small business assistance, grocery vouchers and child care assistance — that City Hall already has up and running.

Taking into account the $29 million in spending proposed by the mayor, the bill was designed to leave $13 million in the reserves.

At the time of the vote, Durkan asked the council to leave the reserves alone, at least until an August update on the city’s economic trajectory. But council members said they were compelled to act in order to help workers, businesses and service providers hit hard by the pandemic. Mosqueda said the reserves were built up for just such a time and that pumping money into working households and small businesses would help Seattle’s economy recover.

The COVID-19 relief bill says the council intends to replenish the reserves next year with $86 million in proceeds from a new tax on big businesses.

The mayor, who opposed the tax also passed by the council last month but declined to veto it, has questioned the replenishment promise, suggesting legal challenges could block the tax and render the proceeds unavailable. Mosqueda has said the city’s lawyers believe the measure stands on solid legal ground.

In a letter accompanying her veto, Durkan wrote, “Seattle needs a cushion to make it through the next 18 months and avoid complete austerity budgets. Council may be willing to risk the entire cushion we need. I am not.”

She added: “The very programs all of us support could fall off a deeper, steeper cliff at a time our most vulnerable residents will need us the most next year.”

Working with the council, the mayor already has directed $233 million toward COVID-19 relief programs, and private philanthropic campaigns have provided local residents with an additional $108 million, a Durkan news release said.

Mosqueda objected to Durkan’s stance. Families are struggling to pay bills and obtain child care, she said, noting rent was due for many people Saturday. The bill seeks to increase spending on programs Durkan has touted, Mosqueda said.

Another wrinkle in the debate emerged Friday when Mosqueda and three other council members proposed that Seattle spend the last $13 million in the reserves this year on community-led public safety research and solutions.

They made that proposal in response to demands by Black Lives Matter advocates to shrink the Police Department and scale up other approaches; cuts to the Police Department likely won’t yield money for community-based solutions for months, so the council members want to tap the city’s reserves to get the ball rolling.

Durkan has been lobbying for more help from Congress, she said. Seattle cannot wait for Congress to act, Mosqueda replied.

Under the council’s bill, this is how the money would be spent:

• $32.6 million for rent assistance and homeless shelters
• $18.1 million for grocery vouchers for immigrants and refugees
• $14.5 million for small business assistance
• $13.5 million for grocery vouchers for others
• $3.6 million for child care assistance
• $2.3 million for affordable housing providers
• $1.1 million for mortgage counseling and foreclosure prevention