City of Everett intends to ask voters to raise property tax rate to lessen budget shortfalls

EVERETT —  The City Council is being asked to place a permanent property tax levy lid lift before voters on August’s ballot to ask residents to bump up property taxes beyond the usual 1% to help the city’s troubled budget.
How much? The City Council would decide during April.
Having Everett Fire join a larger regional fire authority and handing the city library system to Sno-Isle Libraries remain options but won’t appear on August’s or November’s ballots.
On the levy lid lift, the council intends to have meetings on Wednesdays April 3, 10, 17 and 24. The vote would be May 1. Their deadline to deliver something to the county elections office is May 3 to make August.
By state law, governments can only increase property taxes by 1% annually. Those decisions are by elected officials.
This proposal is a one-time permanent lift. A levy lid lift is a special measure that exceeds the 1% barrier if voters approve.
Everett’s city levy rate today is $1.52 per $1,000 in assessed value and generates about $40 million a year.
To meaningfully affect its deficit, city taxes may need to rise by $250 for the average homeowner, going from $793 in city taxes this year to $1,043. A levy lid lift equal to $250 more for the average homeowner would bring in $13.1 million more. On paper, it would stave off Everett having a deficit until 2026. Any smaller still sticks Everett with a deficit.
The council was presented with a spread of increases from $100 to $400 to consider. Finance officials have not yet publicly translated these dollar amounts to levy percentages.
For 2025’s budget, it’s currently looking at a $12.5 million estimated deficit to tackle, which will grow to a $16.8 million deficit in 2026 and a $25.8 million deficit in 2028 if nothing is done.
It will be “one of the most important votes you as a council could have in years,” Mayor Cassie Franklin told the council last week.
The city can’t place a library ballot measure this year. The city missed the timing window for a ballot measure to have Everett join Sno-Isle Libraries starting in 2025. The issue is timing to make the assessor’s tax rolls, city chief finance officer Susy Haugen said.
The city hasn’t discussed with neighboring fire agencies on joining them. It would look to join a regional fire authority bordering Everett, making South County Fire and Marysville Fire the only two, and that’s if their voters would add Everett by annexing the city.
There are multiple steps to take before any ballot measure, including labor negotiations and negotiated agreements.
The city is trying to remedy its financial situation. Everett has had this structural deficit, where the expense of running the city outpaces its tax revenues, for more than 10 years.
State law requires there be no deficit when finalizing the following year’s budget. The city’s recourse for years has been to cut services and defer spending. Franklin has emphasized the city has run out of places to cut.
Everett Fire’s budget is forecast to grow from $28.4 million today to $33.3 million in 2028. The city forecasts the library system’s budget to grow from $6.4 million today to $7.5 million in 2028.
Taking the library or fire department out of the city through annexations reduces the size of the city’s budget. It means people would be taxed by the new entities, either the future fire system providing Everett services or the Sno-Isle Libraries providing Everett library services.
Sno-Isle’s 2024 tax rate is 32 cents per $1,000 assessed value, or about $160 for a $500,000 home.
A few years ago, Everett Fire and Snohomish Fire District 4 formally explored merging that didn’t proceed to a vote.