EVERETT — The Mountlake Terrace City Council will discuss increasing property taxes at its meeting Thursday as part of its 2027-28 budget.
Earlier this year, the city estimated an average budget gap of $4.2 million per year through 2030. Through 2035, the average projected gap was $5.4 million. In 2027, the city’s reserves are projected to drop below the minimum threshold required by its financial policy if the council does not take action.
In May, City Manager Jeff Niten said the gap stems from rising prices for city services combined with a limited ability to raise revenues through property taxes.
In July 2025, the city established a community fiscal sustainability task force to gather community input about strategies to balance the budget and replenish the city’s reserves.
In May, the council approved a budget package — based on recommendations from the task force — that included preferred cuts and revenue sources. That allowed staff to draft a proposed budget that includes the council’s preferences.
One major change is using the city’s property tax banked capacity, which is expected to generate $2.4 million each year in revenue. Each year, state law allows cities to raise property taxes by 1%. If they choose not to raise property taxes, that 1% goes into the city’s banked capacity. The increase would result in an additional $142 per year in property taxes for the average home valued at $591,400, according to city staff.
The council already approved a $20 increase in car tab fees in June. In October, the council approved a variety of fee increases — including utility rates, passport fees, development fees, and parks and recreation fees.
The 2027-28 budget also includes cuts of at least 5% for most departments, according to City Council presentations. For most departments, this includes travel and training budget reductions. The city also removed a small number of vacant positions. The various savings amount to about $1.6 million per year.
While not included in the 2027-28 budget, the previously approved package includes a $2.3 million property tax levy lid lift for recreation, parks, transportation and safety. The levy would go to voters in 2028, and, if approved, it would go into effect in 2029. The plan also includes a renewal of that levy in 2035 for $2.6 million.
A full budget book is available on the city website.
The council will hold a public hearing on the budget Nov. 19. It is scheduled to vote on the final budget Dec. 3.
Jenna Peterson: 425-339-3486; jenna.peterson@heraldnet.com; X: @jennarpetersonn.
