Everett Mayor Cassie Franklin presented the city's proposed 2027 budget to the City Council on Wednesday. The proposal seeks approval of a 0.1% increase to the sales tax to bridge a funding shortfall and preserve current municipal services.
According to Franklin, revenue from this sales tax hike, combined with other tax increases the council authorized earlier this year, would allow the city to resolve a projected $13.1 million deficit while maintaining its current employee headcount. A city spokesperson confirmed Wednesday that no positions would be eliminated under the plan.
The $204 million general fund proposal includes funding for new positions within the municipal court system and the emergency management department. It also increases financial support for human needs grants, which provide local nonprofits with resources to assist with food and housing access.
City spokesperson Simone Tarver stated in an email Thursday that the sales tax adjustment would generate approximately $4.9 million annually.
State lawmakers granted municipalities and counties the authority to enact a 0.1% public safety sales tax in 2025, with a requirement that the funds be directed toward activities that substantially support the criminal justice system. Neighboring jurisdictions such as Lynnwood, Edmonds, and Snohomish County have recently adopted this tax to finance police operations and public defenders.
Franklin noted that the proposed sales tax would also secure long-term funding for Everett's community alternative response team, the CARE Program, which dispatches social workers to manage certain 911 calls involving behavioral health issues.
"I know bringing forward a tax increase is tough, but it's the right decision for public safety in Everett," Franklin said.
Earlier this year, the City Council voted to boost revenue by raising the utility tax rate from 6% to 12%. Officials previously indicated this adjustment is projected to generate approximately $7.5 million in 2027.
The tax applies to all users of the city's water system, which supplies roughly three quarters of Snohomish County's population. The decision to apply the tax outside city boundaries drew criticism from neighboring municipalities and utility districts.
Franklin stated that the city has made consistent cuts to its budget recently, yet a structural deficit persists where spending continues to exceed revenue. Everett, like other cities, has cited the 1% cap on annual property tax revenue increases as a primary cause of its financial challenges.
In 2024, Everett sought voter approval for a property tax levy lid lift to address a projected deficit, but the measure did not pass. To balance the 2025 budget, the city laid off 31 employees, reduced street repair services, shortened library hours, and eliminated the park rangers program. These reductions have remained in effect. The 2026 budget was balanced by utilizing nearly $5 million in COVID relief funds to avert significant cuts.
"The underlying issue remains: The revenues available to fund essential local government services cannot keep pace with the cost of providing them," Franklin said. "For Everett, further cuts would mean eliminating services, having fewer resources for public safety, less maintenance in our parks and further reductions across all city departments."
Everett has revised its business and occupation tax framework, generating an estimated $3.5 million in annual revenue by increasing levies on wholesale, manufacturing, and service providers. The new code simultaneously grants tax exemptions to thousands of firms and reduces rates for retail establishments and restaurants. Municipal officials estimate that approximately 6,500 of the city’s 9,000 businesses now qualify for exemptions, while roughly 2,000 firms have seen their tax burdens decrease.
The revenue generated by these higher taxes will not be deposited into the city’s general fund. Instead, the majority of the money is earmarked for the construction of the proposed Outdoor Event Center, a downtown stadium project. A smaller portion of the funds will support new grants for commercial districts and various business assistance programs.
In 2024, a fiscal advisory panel advised against using tax increases to finance the stadium. During her Wednesday address, Mayor Marylou Franklin countered that addressing the city’s budgetary issues requires more than just spending cuts. She argued that the facility would draw visitors, enterprises, and private capital to Everett, stating that cities must make bold public investments periodically to avoid stagnation and aggressively expand their economic bases.
Franklin also announced plans to issue a new mayoral directive, a formal order requiring staff to investigate opportunities for investment and prepare for expansion in the southern part of the city. This follows the city’s ongoing development of a subarea plan for the Casino Road region. The mayor has issued 14 such directives across her three terms, with the most recent issued in February regarding local policies on immigration enforcement in Snohomish County. Franklin emphasized the need for intentional growth in south Everett to maintain quality of life while preparing for the future.
The city may soon absorb new residents through annexation. Officials have been negotiating the inclusion of areas south of Everett, including the Mariner neighborhood, since April. Franklin indicated on Wednesday that this process could be finalized within six months, potentially adding more than 40,000 residents to the city’s population. She noted that state incentives for annexing urban growth areas could provide the necessary funding to extend city services to these new inhabitants and support further strategic investments.
Finally, Franklin highlighted recent initiatives to streamline housing construction. These measures include zoning changes to permit higher density, the pre-approval of accessory dwelling units, and simplified procedures for dividing properties into multiple parcels. She stated that the next phase of the city’s permitting modernization efforts will be revealed next week.
Budget talks are set to extend through November, with officials indicating the complete fiscal plan remains pending. A detailed breakdown of the city’s proposed spending and revenue is anticipated for release in late October. Council members plan to take a final vote on the measure during their December 2 meeting.
For further information, interested parties may contact William Geschke at (425) 339-3443 or via email at william.geschke@a regional outlet.com. He is also active on X under the handle @willgeschke.