Council holds first reading of 2026 property‑tax ordinance; debate centers on 1% increase

Sedro‑Woolley — City staff presented the first reading of Ordinance 210825 (2026 property tax) at the Nov. 5 study session and walked council through how the levy is calculated, the projected new‑construction addition and the budgetary effects of a 1% increase.

Kelly (city staff) explained the mechanics: the council sets the budgeted levy (the total dollars collected), which is then divided by total assessed value to determine a levy rate. Kelly said the county projects about $32 million in new construction for the city in 2026, which the city estimate would yield roughly $84,000 in new property‑tax revenue. Kelly also said taking the 1% increase would result in an estimated $14 additional annual cost for a homeowner of a $532,000 property.

“...the proposed 1% increase results in on a home that's $532,000, $14 additional annual expense,” Kelly said while explaining the estimate. The presentation included examples showing that a homeowner’s tax change depends on how their assessment changes relative to the overall citywide assessed value.

Council debate split along familiar budget tradeoffs. Councilman Burns supported the 1% increase, saying it helps the city maintain services and noting inflation has outpaced the allowable 1% in recent years: “I am in favor of the 1% for $14 I'll pay an extra $14 a year to make sure that we keep the lights on in the city.” Several other members questioned whether the city should raise the levy while discussing one‑time uses of general‑fund reserves earlier in the same meeting; Councilman Henderson argued the city did not need the 1% increase given the current fund balance and said he would oppose it.

Next steps: The item is scheduled for a public hearing and second reading on Nov. 12, after which the council may adopt a final ordinance and submit required documents to Skagit County by the county’s Nov. 28 deadline.