Mountlake Terrace advances package to close budget gap

Published 1:30 pm Friday, May 8, 2026

EVERETT — The Mountlake Terrace City Council advanced a budget proposal Thursday that includes two large property tax increases to close the city’s projected budget gap.

The council voted 5-2 to advance the proposal, which allows staff to prepare budget materials for the council to vote on later this year. Mayor Pro Tem Bryan Wahl and council member Laura Sonmore voted against the proposal, citing the large tax increases.

The city estimates an average budget gap of $4.2 million per year through 2030. Through 2035, the average projected gap is $5.4 million. In 2027, the city’s reserves are projected to drop below the minimum threshold required by its financial policy.

The gap stems from rising prices for city services combined with a limited ability to raise revenues through property taxes, City Manager Jeff Niten said.

In February, a community fiscal sustainability task force presented the council with two proposals for closing the gap. City staff made adjustments to those proposals over the past few months after gathering council feedback.

The approved proposal includes a $2.3 million property tax levy lid lift for recreation, parks, transportation and safety that goes into effect in 2029 if approved by voters. The plan also includes a renewal of that levy in 2035 for $2.6 million.

The $2.3 million levy would increase property taxes by $266 per year for the average homeowner, according to city staff. The average home in Mountlake Terrace is valued at $591,400.

“I hope that all of our community members know that you do not have a single council member sitting up here who does not care about the impact that the decision we are making right now is going to have on you and on future residents of Mountlake Terrace,” council member Erin Murray said. “But there are real impacts, both in increased costs, fees, taxes, and there is real impact in cuts in service.”

In addition, the plan includes raising property taxes to the city’s full banked capacity in 2027. In 2023, the city decided not to raise property taxes to the highest lawful amount because it anticipated higher property taxes from annexing into South County Fire. As a result, the city has $2.47 million in banked capacity, and it can legally raise property taxes to collect that amount. The full banked capacity would add an estimated $142 per year to the average homeowner’s property tax bill.

Wahl said that by using the banked capacity, the city would be going against a commitment it made to voters during the South County Fire annexation discussions.

“I want to make sure that I’m honoring that commitment to our residents,” he said. “And if in fact they are willing to vote to support additional property taxes, which we’ll be asking them to do, then they’ll have the opportunity to tell us that that is, in fact, OK to increase their property taxes to be able to fund the services that we need to provide to the city.”

Instead, Wahl said he was in favor of looking at regionalization of services and implementation of artificial intelligence to cut down on costs.

Mayor Steve Woodard said he didn’t believe the city should have still raised property taxes during the South County Fire annexation.

“I did not see this coming as the reason, but the rationale made sense that you were already paying that, and you knew that the fire services were going to cost more no matter what,” he said.

In addition to the property tax changes, the proposal includes $1 million in historical budget savings and reductions in general fund expenses. The city would add $20 to vehicle license fees, generating $315,000 in revenue. The proposal also includes fee increases for its fleet partnership with Shoreline and picnic and plaza rentals, generating a combined $60,000 in revenue. Software reductions would add $50,000 and community development fee increases would add $200,000.

Previous proposals included establishing a metropolitan parks district, which council members said in previous meetings they did not support.

The city must hold a public hearing on revenue sources in October and November and adopt its final 2027 budget by the end of the year.

Jenna Peterson: 425-339-3486; jenna.peterson@heraldnet.com; X: @jennarpetersonn.