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Coronavirus (COVID-19) Economic Impacts and Mitigation

This page provides information on the economic impacts of the 2020 novel coronavirus pandemic (COVID-19) on local governments in Washington State, including revenue impacts, state and federal emergency funding, and local government efforts to ease the financial burden on small businesses and workers.

It is part of MRSC's Coronavirus (COVID-19) Resources for Local Governments series.

Latest Updates

To help you keep track of the rapidly changing situation related to COVID-19, here is a summary of recent changes to this page:

Thursday, April 2

Wednesday, April 1

  • Added Ocean Shores executive orders waiving utility late fees, suspending shutoffs, and reestablishing previously shut-off services provided that the customer establishes a payment plan.
  • Added Kirkland ordinance authorizing finance director to temporarily suspend city utility fees and utility taxes due to COVID-19.

Tuesday, March 31

Monday, March 30

Friday, March 27


Overview

The economic shock from the coronavirus pandemic has been sudden and unprecedented. Within the span of just a couple weeks, restaurants and public gathering spaces have been shut down statewide and consumer spending on non-emergency items has plummeted. The full effect of these impacts will not be known for some time, but it is clear they will be significant. Many businesses will be vulnerable to closure, and many employees may lose their jobs and sources of income.

The federal government is stepping in to provide some assistance, and in addition some local governments are taking action to reduce the burden on local businesses and workers who are losing significant amounts of income.

Free On-Demand Webinar: Fiscal Impacts of COVID-19

On March 26, MRSC recorded a free webinar on Preparing for the Fiscal Implications of COVID-19. You can watch the entire one-hour webinar recording, download the slides, or skip directly to the following sections:


Local Government Revenue Impacts

Due to the sudden and extensive economic impacts, many local governments will see their revenues drop, particularly those revenues associated with economic activity, tourism, cultural activities and events, and gallons of gasoline purchased (due to more people staying at home).

In particular, local governments are likely to see drops in sales tax revenues, lodging taxes, motor vehicle fuel tax (MVFT) distributions, admissions taxes, and other related revenue sources.

Some counties are also deferring certain property taxes paid directly by individual property owners, which could have a significant impact on cash flow for a number of local agencies.

For more information, see:


Federal and State Economic Relief

The federal government is taking steps to provide financial relief to families, businesses, and government agencies affected by COVID-19.

The Families First Coronavirus Relief Act (FFCRA) was signed into law on March 18, which provides temporary leave programs for employees and expands unemployment benefits. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was signed into law on March 27. This is a wide-ranging stimulus bill that includes aid for state and local governments. Summit Law Group and Pacifica Law Group have provided summaries of these pieces of legislation (see below).

In addition, small businesses throughout Washington State are now eligible to apply for low‑interest U.S. Small Business Administration (SBA) Economic Injury Disaster Loans to offset economic losses because of reduced revenues caused by the impact of the COVID-19 pandemic. The list of eligible counties has been expanded to include the entire state.

Below are some useful resources pertaining to state and federal economic assistance programs:


Eviction Moratoriums

On March 18, Gov. Inslee imposed a 30-day statewide moratorium on residential evictions for non-payment of rent in an attempt to reduce the immediate economic burden to local residents.

A number of jurisdictions have also imposed their own local eviction moratoriums. Some of these examples are broader than the governor's order, including some that prohibit commercial evictions or apply to all residential evictions except those related to an imminent threat to health and safety.

Jurisdictions considering local eviction moratoriums or similar measures should consult with their legal counsel. The procedures for residential evictions are governed by state law and are addressed through the judicial processes in county superior court. While the policy reasons for such an order are understandable, it is not clear, even in an emergency, whether a local government can adopt a measure that would prohibit the use of a judicial process that is otherwise available under state law. Landlords may argue that such eviction orders are preempted by the Washington Residential Landlord Tenant Act (chapter 59.18 RCW).

However, for those jurisdictions that are considering such an approach, below are a few examples.

  • Auburn:
    • Emergency Proclamation 2020-03 (2020) – Issued after governor's statewide moratorium; waives all residential tenant late fees and charges for 30 days and expresses support for the governor’s order.
    • Emergency Proclamation 2020-04 (2020) – 30-day moratorium on commercial evictions and late fees, provided that the tenant provides notice one week before payment is due that the tenant is unable to pay due to circumstances related to the coronavirus pandemic and provides supporting documentation.
  • Everett Moratorium on Residential Evictions (2020) – Issued prior to governor's order; prohibits residential evictions for non-payment of rent for 30 days and suspends late fees.
  • Kenmore Emergency Moratorium on Residential Evictions (2020) – Issued prior to governor's order; prohibits all residential evictions except those for protection of life and safety for approximately 6 weeks because "residential evictions would dramatically undermine the containment and mitigation efforts needed to slow the transmission of COVID-19." Also suspends late fees and allows courts to grant continuances for pending evictions.
  • Seattle Emergency Moratorium on Residential Evictions (2020) – Issued prior to governor's order; temporarily prohibits residential evictions for non-payment of rent due to economic impacts of coronavirus (COVID-19) pandemic. Includes FAQs for landlords and tenants.

Gift of Public Funds Issues

The Washington State Constitution prohibits gifts of public funds “except for the necessary support of the poor and infirm.” There is a related prohibition in the State Constitution on the lending of credit by public entities.

Based on our understanding of this provision, MRSC has historically advised that financial contributions by local government entities to private businesses, either in the form of a grant or a loan, are generally prohibited. We have also previously advised that there must be a proper public purpose or public benefit resulting from such expenditures beyond providing financial support to a local business. 

However, the Washington Attorney General issued a memo to state and local governments clarifying that public funds may be spent “for the primary purpose of protecting and promoting public health which may have an incidental benefit on private citizens and entities.” This may provide more flexibility for local governments to assist local businesses. We recommend discussing any proposal related to financial assistance with your legal counsel.

if your jurisdiction has adopted ordinances, resolutions, policies, or other steps to provide economic assistance to local residents and businesses, please let us know by contacting our librarian Gabrielle Nicas at gnicas@mrsc.org.


Utility Fees, Shutoffs, and Payment Plans

To mitigate the economic impacts of COVID-19 on local residents, a number of local government utility providers have adopted measures temporarily suspending utility shutoffs, waiving late fees and interest, and/or authorizing the use of deferred payment plans. The governor's Emergency Proclamation 20-23.1, issued March 24, strongly encourages local utilities to take such measures.

Below are a few examples of such approaches:

  • Covington Water District Resolution No. 4409 (2020) – Emergency declaration due to COVID-19; also temporarily suspends locking of meters, filing of liens, and certain fees until May 31, 2020.
  • Duvall Public Health Emergency and/or Pandemic Utility Billing Policy (2020) – Authorizes city to suspend utility late fees and postpone water disconnections during pandemics or other declared public health emergencies. Includes notification, reporting, and post-emergency procedures.
  • Kirkland Ordinance No. O-4722 (2020) – Authorizes finance director to temporarily defer and suspend collection of city utility charges and utility taxes. Expires 30 days after Governor's rescission of order closing all non-essential businesses.
  • Ocean Shores Executive Orders 01-2020 and 02-2020 (2020) – Directing utility department to temporarily suspend late fees, halt utility shutoffs, and reestablish utility service to customers whose service had previously been shut off provided that they establish payment plans.
  • Seattle:
    • Executive Order No. 2020-03 (2020) – Provides relief to workers and small businesses, including business and occupation (B&O) tax deferrals, local and federal loan assistance, allowing extended utility payments, and halting utility shutoffs.
    • Council Bill 119758 (2020) – Draft bill (on March 23 agenda) to temporarily waive interest/late fees on delinquent utility bill balances to help mitigate the economic impacts of the coronavirus (COVID-19) pandemic on businesses and workers; includes bill summary and fiscal analysis.
  • Toppenish Resolution Nos. 2020-09 to 2020-11 (2020) – Three separate resolutions (1) temporarily suspending utility shutoffs, (2) temporarily suspending utility late fees, and (3) authorizing the city manager to establish payment plans for customers economically impacted by COVID-19
  • Woodinville Water District Resolution No. 3959 (2020) – Emergency declaration for COVID-19; includes suspension of liens and water service termination

Rent Deferrals for Local Government Tenants

​A local agency, as a landlord, may also be able to provide for deferred rent during an emergency if the specific facts warrant it. For example, if the facility in which the tenant’s business is located is closed due to the emergency, then suspending or deferring rent would be an appropriate measure. The broader question of whether rent relief may be provided should be deferred to a time when more is known about the overall impact of the emergency on the tenant’s business.

Below are examples of local agencies that have provided some form of rent deferrals or relief to their tenants.

  • Bellingham Executive Order 2020-01 (2020) – Providing relief to individuals and businesses impacted by COVID-19 by deferring quarterly B&O tax payments, providing extended utility payments and waiving late fees, suspending water shutoffs, and waiving two months’ rent for small businesses/nonprofits leasing city facilities.
  • Port of Port Townsend COVID-19 Declaration of Emergency (2020) – Emergency declaration by port district executive director, including commission resolution ratifying the declaration and authorizing rent deferrals up to 3 months for port tenants most directly impacted by COVID-19, provided that back rents must be repaid within 12 months.

Other Local Economic Assistance Programs

In addition to eviction moratoriums and changes to utility payment policies, a number of local governments are also exploring other ways to provide financial relief to local residents and businesses.

Examples include, but are not limited to: deferring local business and occupation (B&O) taxes, extending deadlines for business license renewals, establishing temporary short-term street parking for restaurant takeout, and providing per diem to employees to buy food and beverages from local restaurants.

Below are selected examples:

  • Bellevue COVID-19 Business/Nonprofit Resources – Webpage with resources for various types of businesses. City is taking actions such as suspending utility shutoffs, temporarily waiving late fees, and establishing 3-minute parking in certain areas of downtown for restaurant takeout. City also strongly encourages all affected businesses to document the financial impacts for insurance purposes and potential future relief from state and federal agencies.
  • Bellingham Executive Order 2020-02 (2020) – Authorizing the emergency use of public facilities to provide temporary shelter to people experiencing homelessness and other services needed to respond to the COVID-19 pandemic.
  • Kirkland Small Business Relief Fund – Partnership between city, chamber of commerce, and Banner Bank and seeded with $250,000 from Google's philanthropic arm
    • COVID-19 Resource Packet for Kirkland Business (2020) – Resource packet from Kirkland City Manager’s Office with information, resources and strategies for local businesses. Includes a letter of outreach from the city council to local business owners. Also includes list of contacts for SBA emergency loans and State Unemployment Assistance.
  • Issaquah:
    • Ordinance No. 2904 (2020) – Temporarily suspending the city's pass-through charge on recycled paper carryout bags
    • Rental Assistance – City allocated $100,000 in emergency funding for rental assistance to those affected by COVID-19 outbreak
    • COVID-19 Relief Meal Allowance Plan (2020) – Plan to support City employees and local businesses during the COVID-19 emergency by providing City employees who must be physically present at the worksite with a $25 per day meal allowance to be spent purchasing food and non-alcoholic beverages from local businesses.
  • Seattle Temporary Changes to Parking Enforcement – Includes short-term free parking (and free signs) for restaurant pick-up, suspension of 72-hour parking rule, and other changes
  • Shoreline Emergency Community Response Grant Program (2020) – $100,000 grant fund drawn from city's general fund to provide grants to 501 (c)(3) and/or faith-based organizations who provide direct emergency response support to Shoreline residents. Document includes background, program outline adopting resolution and grant application form.
  • Toppenish Resolution No. 2020-08 (2020) – Authorizing the state DOR Business Licensing Services to extend city business licenses with a March 31 deadline to May 31 and waive late fees if a business owner calls stating they are faced with undue hardship as a result of COVID-19.

Last Modified: April 02, 2020