Everett projects $576.5 million in preliminary 2026 revenues; taxes drive general fund

Everett finance staff presented a preliminary citywide revenue forecast of $576,500,000 for 2026 and told the City Council that roughly $176,700,000 of that is projected to support general government services such as police, fire, parks and libraries.

The forecast matters because taxes — primarily property tax, sales tax and business & occupation (B&O) tax — account for about 75% of general government revenue, making the city’s core services sensitive to regional and national economic shifts.

Heidi Brillantes, Everett’s finance director, summarized the forecast and its components and said the city’s general government revenue projection for 2026 is approximately $177,000,000. "Taxes are by far our largest source. That accounts for 75% of total resources," she said.

Jamie Lee Graves, assistant finance director, reviewed major revenue categories and legal constraints on property tax. "By law, all real and personal property is subject to taxation unless explicitly exempt," Graves said, explaining that state law also limits levy increases to 1% annually unless voters approve a higher amount.

The presentation broke down the $576.5 million forecast into general government and enterprise/non-general funds. Staff said about $399.8 million is expected from non-general-government sources — including utilities, Everett Transit and golf operations — which are supported primarily by rates, fees and grants and cannot legally be used to cover general government operating costs.

Key projections highlighted by staff: - Property tax: about $42,500,000 (≈24% of general government revenue), including 1% allowable growth and new construction added to the tax roll. - Sales tax: projected at roughly $40,500,000 (≈23% of general government revenue), a 1.7% increase over the 2025 revised forecast; staff noted retail and construction drive much of Everett’s taxable sales. - B&O tax: about $22,300,000 (≈13% of general government revenue). - Miscellaneous revenues: $24,200,000 (≈14%), driven in part by operating transfers tied to labor support and specific programs. - Utility taxes: approximately $15,000,000 (≈8%), with electricity and natural gas singled out as the largest contributors.

Brillantes and Graves also described notable one-time and restricted transfers included in the 2026 assumptions: an ongoing SAMHSA grant contribution to the city’s alternative crisis response program, transfers from the criminal justice fund to support a violent crime unit, use of lodging tax revenues for events and the Everett Performing Arts Center management contract, and $4,850,000 in local COVID relief program funds being moved into the general government for 2026 (a mix of previously allocated but unspent funds and unallocated balances).

Council member Ryan questioned the sales tax optimism and asked staff to explain risks. "Maybe, I've been more of a glass half half empty kind of person lately," Ryan said, citing concerns about purchasing power and labor-market disruptions. Brillantes and Graves responded that the sales tax projection (about 1.7% growth) is conservative compared with historic peaks and that staff are monitoring state changes to taxable sales categories that took effect Oct. 1 and will be reflected in future reporting.

Staff emphasized forecasting uncertainty and historic accuracy: the finance team said Everett’s revenue forecasts have historically been within about 2.5% of actual performance. They recommended vigilance for downside risk if inflation or consumer confidence weakens and noted upcoming opportunities to refine estimates when more data arrive.

The council was told more detailed budget hearings will follow: the first 2026 preliminary budget hearings start Nov. 5.