Funding for mental health services in King County could take a $42 million hit as the shutdown to prevent the spread of coronavirus eats away at sales taxes, according to King County Budget Director Dwight Dively.
“The news is not good,” Dively said. “In fact, the news is very bad.”
The sales tax forecast for 2020 through 2022 projects shortfalls of $79 million to the general fund, $42 million to Mental Illness and Drug Dependency (MIDD) and $397 million to King County Metro. The projections may be too rosy, Dively told King County councilmembers on May 5.
It’s too soon to know what the impact will be, said Sherry Hamilton, spokesperson for the Department of Community and Human Services (DCHS), in an email.
“Yes, unfortunately we are looking at a significant reduction in the sales tax revenues that normally support MIDD,” Hamilton wrote. “We are beginning discussions about priorities and options, both for 2020 and also looking at impacts to the 2021-2022 biennial budget currently under development.”
MIDD funding comes from a 0.1 percent sales tax that brings in $136 million every two years specifically for behavioral health for low-income people.
The reliance on sales taxes for services like mental health is a weakness during an event like a pandemic, when funding takes a dive even as services are more necessary. The pandemic creates stress, fear for oneself, fear for a loved one and financial insecurity, all of which are associated with declines in mental health, according to the Centers for Disease Control and Prevention (CDC).
“Fear and anxiety about a disease can be overwhelming and cause strong emotions in adults and children,” according to the CDC website. “Coping with stress will make you, the people you care about, and your community stronger.”
Coping with such stress can hurt mental health, cause changes in sleep or eating patterns, worsen chronic health problems and increase dependency on substances. Alcoholic beverage sales increased 55 percent in the U.S. by mid-April compared to the same time last year, demonstrating at least one way that people are handling the prolonged crisis.
That’s a concern, King County Councilmember Reagan Dunn said.
“We’ve got a very, very serious problem on our hands we need to take a look at in terms of addiction and recovery,” Dunn told his colleagues.
Shortfalls are a predictable consequence of funding services with sales taxes: Revenues drop as people with few resources start spending much less while, at the same time, lower-income people are more in need of services. Washington is particularly reliant on regressive taxes on income and property because graduated taxes are unconstitutional and income taxes are banned by a 1980s state law.
Attempts to raise money for public services in other ways have been unsuccessful.
The city of Seattle passed an income tax on high earners that ultimately died in April when the Washington State Supreme Court refused to review the case. A tax on business was attempted in 2018 before the City Council repealed it. Seattle City Councilmembers Kshama Sawant and Tammy Morales are fielding an effort to raise taxes on business again, but the effort was stymied when Councilmember Lorena Gonzalez determined that meeting to raise taxes was against the governor’s guidance on public meetings.
Cities, counties and states are having financial difficulties during the coronavirus as economic activity slows to a halt. They received some relief from the federal government’s coronavirus relief fund, but additional help is at question.
Senate Majority Leader Mitch McConnell said in April that Republicans were not open to “revenue replacement” for local governments, only to walk that back a week later, according to CNN.
How states and local governments will overcome such dramatic revenue shortfalls without federal assistance has yet to be seen.
Ashley Archibald is a Staff Reporter covering local government, policy and equity. Have a story idea? She can be can reached at ashleya (at) realchangenews (dot) org. Follow Ashley on Twitter @AshleyA_RC.
Read more in the May 20-26, 2020 issue.