As sales tax plummets in King County, mental health and drug program funding dries up

King County will have to find a way to make up $20 million in funding for its Mental Illness and Drug Dependency funding by the end of the year.

Over the next three years, the county is projecting a $42 million deficit. The funding — known as MIDD — goes toward a variety of diversion courts, mental health and drug dependency services across the county.

“We do have a severe effect on the MIDD budget that is coming from loss of sales tax revenue this year,” said Leo Flor, head of the county’s Department of Community and Human Services at a May 28 meeting of the MIDD advisory committee.

Dwight Dively, the county’s budget director, said sales tax revenue across the county dropped dramatically in March when compared to the previous year.

Lodging taxes this March were down 90 percent year-over-year. Restaurant and bar sales tax revenue was down 70 percent, and clothing stores and auto dealership revenue were each down by about 60 percent. The MIDD program is entirely funded through sales tax.

And while the county could theoretically choose to fund MIDD programs through its general fund, that budget is also facing a $150 million deficit in the 2021-22 biennium budget.

“The option of continuing programs by having the general fund pay for them is essentially an option that does not exist,” Dively said.

In an attempt to balance this year’s budget, the county will likely use half of its MIDD reserves, or $7 million. It will also likely sell a building in Georgetown where a temporary sobering center operates. That sale could pump another $4 million into the budget. Even still, that leaves a $9 million gap that has to be filled with cuts to programs, according to county officials.

There wasn’t a finalized list of programs at the May 28 meeting that could see reductions. But additional savings could come from therapeutic courts, youth risk assessment programs and by not filling vacant positions.

The county will need to find new revenue sources to fund MIDD programs over the next three years. Dively said this could come from the federal government or from state-authorized sources.

Reductions in services are coming later this year even as demands for them are higher due to the pandemic, said King County Council member Jeanne Kohl-Welles.

“The rates are going up, depression and so forth,” she said.

Nearly 29,000 people from across the county used MIDD-funded services in 2017, of which 42 percent were under age 17. Participants in the programs saw a 29 percent drop in psychiatric hospital use, a 35 percent drop in jail bookings and a 53 percent reduction in emergency room admissions.

The county was awarded more than $260 million as part of the federal CARES Act. However, that funding can’t be used to back-fill the MIDD budget, according to county officials. This money comes with restrictions, prohibiting the county from using it on programs that existed before the pandemic began. The county could use it in future supplemental budget packages if the county can show an increased need for MIDD-programs stemming from the pandemic.