Lake Stevens council hears updated forecasts, weighing cuts and a public‑safety sales tax amid rising legal costs

Lake Stevens — City staff on Tuesday laid out updated budget forecasts that show only modest gains in property‑tax receipts and weaker sales‑tax growth, leaving the city facing a general fund shortfall that could push operating reserves into the red within the next two years.

Barb (staff member) told council members the assessor’s updated property‑tax numbers increased the city’s estimate by about $30,000 — “about half a percent” — while sales‑tax growth assumptions were reduced from earlier projections to roughly 2.7% for 2025 and 2% for 2026. She said investment‑income assumptions have also been lowered, producing an estimated $500,000 decline in interest revenue across the city for 2026.

The presentation focused on three pressure points: revenues (property, sales and investment income), rising legal costs and personnel expenses, and the city’s ability to deliver capital projects. Barb highlighted a roughly 98% increase in public‑defender costs and signaled prosecutors may request additional increases, a jump that staff said is contributing to the budget gap that the council must address.

Why it matters

City leaders must decide whether to close the gap through spending reductions, by shifting one‑time funds into ongoing uses, or by pursuing new revenue. Council members repeatedly pushed staff for quantified scenarios that show the service‑level impacts of specific percentage or dollar‑value cuts, saying voters deserve clear, comparable choices ahead of public hearings.

What staff proposed and what council discussed

• Reallocations and one‑time moves: Staff proposed reallocating…