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- calendar_today November 10, 2026
City Council Considers Property Tax Increases
The Mountlake Terrace City Council is set to discuss a property tax increase as part of its ongoing 2027-28 budget process. The proposal will be addressed at the council's meeting on Thursday, following a year marked by debate over how to address a multi-million dollar budget gap.
Background: Addressing a Significant Budget Gap
Earlier in 2026, the city estimated an average annual budget gap of $4.2 million through 2030, with projections rising to $5.4 million per year through 2035. According to city leaders, a combination of rising costs for municipal services and limitations on revenue growth—particularly from property taxes—have contributed to the shortfall. If unaddressed, city reserves are expected to fall below the minimum required by financial policy in 2027.
Community Input and Fiscal Task Force
To help shape the city's approach, a community fiscal sustainability task force was established in July 2025. This group gathered public feedback on possible strategies to balance the budget and restore reserve funds, ultimately providing recommendations to the city council.
Major Revenue and Cost-Saving Measures
Following the task force's suggestions, the council approved a budget package in May 2026. One major change is the use of the city’s property tax banked capacity, which is expected to raise $2.4 million annually. State law permits cities to increase property taxes by up to 1% per year, and unused increases accumulate as banked capacity. For the average home valued at $591,400, this would mean an estimated property tax increase of $142 annually, according to city staff.
The council had previously approved a $20 increase in car tab fees in June, and followed this with various other fee increases in October. These include higher rates for utility services, passport processing, development permits, and parks and recreation offerings.
Department Cuts and Position Reductions
To further reduce expenditures, the draft 2027-28 budget includes cuts of at least 5% for most departments. The majority of these reductions target travel and training expenses. The city has also eliminated a small number of vacant positions, with these savings expected to total about $1.6 million per year.
Future Levy Lid Lift Proposal
While not part of the immediate 2027-28 budget, the council-approved long-term financial plan includes a $2.3 million property tax levy lid lift to support recreation, parks, transportation, and safety. This measure would go before voters in 2028 and, if passed, would take effect in 2029. Another renewal is planned for 2035, increasing the levy to $2.6 million.
Upcoming Public Hearing and Vote
A complete budget book is available on the city’s website for public review. The city council will hold a public hearing on the proposed budget on November 19, with a final vote expected on December 3.
Related coverage
Source: heraldnet.com.
