EVERETT — Edmonds residents will see higher utility tax bills in 2026 after the City Council passed an increase Tuesday.
The council voted 4-3 to raise some utility taxes from 10% to 20%, generating an estimated $3.3 million in revenue for 2026.
The change affects water, sewer and stormwater taxes. The average household will see its bimonthly bill increase by about $26, council President Neil Tibbott said. The increase will last for 18 months, the ordinance states, ending in July 2027.
“It allows the city to stabilize our short-term funding gaps that we’ve identified over the last year,” Tibbott said.
The vote came as the city attempts to recover from a failed property tax levy lid lift. In November, voters rejected the city’s proposed $14.5 million levy. In the 2026 budget, the city had planned for at least $6 million in additional property tax revenue. Without the utility tax increase, the city’s ending fund balance would have gone to $244,000 by the end of March.
“We’ve never been that low in our cash flow,” Tibbott said.
The city first declared a fiscal emergency in 2023, allowing it to use reserves to fill its budget gap. In 2024, it used one-time COVID-19 assistance funding. This year, it borrowed $6 million from its own water and storm funds.
“That’s how we come to this place where a utility tax would make sense,” Tibbott said.
In June, the council unanimously passed a resolution stating the cuts the city would have to make if the levy failed. According to the utility tax resolution, the increase prevents the city from having to make all of those cuts.
“There are other levers we will have to pull,” council member Chris Eck said. “However, should we not pull this, that means we can’t weather any sort of emergency. We can’t continue to borrow internally. That is not an option.”
Council members Vivian Olson, Michelle Dotsch and Will Chen voted against the increase, saying they did not want to support another one-time funding measure.
“We’re being accused of fear mongering every time that we say something is going to go away, but it’s because we’ve been living beyond our means, and we’ve had this quality of life we can’t afford,” Olson said. “I just don’t think I can vote for another band-aid.”
Dotsch said she was against raising utility taxes as utility rates have already risen the past few years. She said bimonthly utility bills have increased by more than $80 since 2023.
“I don’t think this type of increase really helps those that are on fixed income and can’t afford these already high increases that they’re going to be hit with next year,” she said.
Households with less than $54,000 of annual disposable income can apply for a 50% utility rate reduction on the city’s website. Those with less than $64,000 are eligible for a 30% rate decrease.
Dotsch also raised concerns that the city could become reliant on the additional tax revenue after July 2027.
“I worry that any temporary tax becomes a permanent tax,” she said.
Council members who voted for the increase said that, in addition, the city must work to find additional revenue streams or expenditure cuts.
“This is something that will be good for the community and also good for us to get a little bit of time so that we can look at other, longer-term options,” council President Pro Tem Susan Paine said.
Jenna Peterson: 425-339-3486; jenna.peterson@heraldnet.com; X: @jennarpetersonn.
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