Everett staff project $7.9 million 2026 deficit, propose one‑time fixes and service reductions

Everett finance staff told the City Council Budget Committee on Sept. 17 that the city is projecting a $7,900,000 budget deficit for its 2026 general government budget and presented a package of one‑time and ongoing balancing measures to close the gap.

"As of August 2025, we're projecting a budget deficit of $7,900,000 in 2026," said Jamie Lee Graves, assistant finance director, during the committee presentation. The Office of Finance reported year‑to‑date revenues through July 31 exceeded projections by $2,147,681 (2.3%), driven largely by business & occupation tax receipts and grant receipts, while year‑to‑date expenditures were about $1,738,437 (1.8%) under budget.

Finance staff outlined a mix of revenue and expenditure actions that would eliminate the projected shortfall. Major elements include continuing the suspension of general government contributions to the city’s LEOFF 1 (Law Enforcement Officers' and Fire Fighters' Retirement System) police and fire pension funds carried forward from the 2025 budget; a $1,000,000 reduction in the general fund contribution to the city street overlay program (leaving a projected $2,400,000 for overlay work in 2026 funded by car tab fee revenues, property tax, CIP and real estate excise tax); elimination of the standard 2% growth…