Lawmakers moving to tap rainy day fund for coronavirus response. Do they need to?

Moving swiftly, just days after Gov. Inslee declared that the spread of the coronavirus had created a state of emergency, lawmakers in both chambers overwhelmingly voted to appropriate $100 million from the state’s rainy day fund. As Jerry Cornfield reports in the Everett Herald, a small amendment means the bill needs action once again in the House before heading to the governor.

The Senate, on a 47-0 vote Wednesday evening, approved a measure providing $100 million in emergency funding to cover costs incurred by state agencies and local health districts in responding to the outbreak. Senators amended House Bill 2965 to ensure residents can, if necessary, access unemployment benefits if they are under quarantine or isolation during the outbreak.

As a result of the changes, the bill will go back to the House for a final vote before heading to the governor for signing.

Given the vote totals – nobody voted against it – this thing appears done. But there’s reason to question whether the dip into the rainy day fund was necessary. The Washington Research Council asks and answers the question in a blog post put up yesterday morning. Emily Makings writes,

The state certainly has an important role in funding the response to public health emergencies like this. And such emergencies can be appropriate uses of the rainy day fund. However, both the House- and Senate-passed supplemental operating budgets would increase appropriations by over $1 billion. If either budget is enacted, 2019–21 appropriations would increase by about 21 percent over 2017–19 spending.

State coffers are flush. Surely the Legislature could respond to this need without tapping the BSA. As we have written, a recession will occur sooner or later, so it would behoove the Legislature to moderate its spending on non-emergency items in this supplemental budget year and avoid making appropriations from the BSA. The BSA will be needed in the event of a recession, and the coronavirus outbreak could actually make a recession more likely in the near term as economic uncertainty increases (see, for example, the stock market’s response to the outbreak and the Fed’s emergency rate cut).

She makes a good point. Lawmakers had other choices.