Governor’s office responds to Clark County questions on CARES Act funding

The county says the state is withholding money meant for local governments throughout the state

CLARK COUNTY — The office of Gov. Jay Inslee says Clark County’s assertion that the state is withholding CARES Act funding meant for local governments is false.

Last week, the full County Council sent letters to Inslee, along with state and federal lawmakers, urging them to seek clarity from the Office of Financial Management (OFM), which is responsible for doling out the stimulus funding sent to states.

The Clark County Public Service Center in downtown Vancouver. File photo
The Clark County Public Service Center in downtown Vancouver. File photo

That letter points out that Spokane County, with a population of 523,000, received $91.2 million. Clark County, with 488,000 residents, only received $26.8 million.

Mike Faust, deputy director of communications for Gov. Inslee’s office, says disbursements to counties or cities with more than 500,000 people were made directly by the U.S. Department of Treasury (DOT).

“That same formula provided nothing to Clark County because the federal legislation did not allocate funds to any local governments with populations under 500,000,” wrote Faust in an email to Clark County Today.

“Clark County received a distribution from the state out of the state’s share of CARES money, which the state used to take care of local governments that got nothing under the bill,” Faust added. “Our allocations were equitably distributed across counties based on their population.”

But the county argued in their letter that the DOT guidelines were that states should “transfer funds to local governments with populations of 500,000 or less, using as a benchmark the per capita allocation formula that governs payments to larger local governments.”

“This has not happened in Washington state,” said the county council members in their letter.

The $2 trillion CARES Act provided $150 billion directly to states, depending on population, with no state receiving less than $1.25 billion. Washington state received nearly $3 billion as part of that relief package, with $800 million of that paid directly to King County, Pierce County, Snohomish County, Spokane County, and the city of Seattle.

The U.S. Treasury guidelines stipulated that states should take 45 percent of the remaining distribution — in this case $2.2 billion — and allocate that for local governments not receiving direct payment from the DOT.

Under that formula, Washington state would have distributed $990 million to local governments. In reality, the state paid out just under $300 million, of which Clark County received the largest share.

“There is a fair amount of frustration, not just in Clark County, but with other cities and counties across the state,” said John Wiess, a lobbyist with Gordon Thomas Honeywell Governmental Affairs, which represents Clark County, in addition to the city of Battle Ground. “The double-edged sword there is that the state has put a self-imposed requirement that those dollars be spent by the end of October.”

The county is also pushing to see the money released to local governments to use as they see fit. Currently, it is available only by request to cover COVID-19-related expenses. Local governments argue that many expenses likely won’t be clear by the end of October, leaving them to pick up the tab from already-depleted budgets.

While Clark County Finance Director Mark Gassaway said Monday that he has not yet received a direct response from the governor’s office, he had been made aware of the remarks made to media outlets reporting on the story.

In an email to the council members obtained by Clark County Today, Gassaway said he was “dismayed” by the governor’s response.

“It is also clear from the County’s communications with the Washington State Department of Financial Management that they know what the DOT guidance says and have willfully chosen not to follow it and ignore the intent of the legislation,” Gassaway wrote. “They refer to the DOT guidance as ‘nearly guidance’ justifying their decision not to fully allocate funding to local jurisdictions since DOT used the word ‘should’ not ‘shall.’”

Gassaway added that his conversation with the DOT Inspector General led him to believe the agency was concerned with the situation, and planned to issue updated guidance within the next few weeks.

Wiess noted that the state’s congressional delegation was also interested in the situation, and could look to address it through a new bill in the senate, aimed to clarify how states should allocate funding from the federal government.

Clark County Today has reached out to the governor’s office for clarification on their formula used to distribute local CARES Act monies, and will update this story with any response we receive.