Everett City Council approves FY2025 tax measures, including 25% homeowner exemption and $10M free-cash offset

Everett City Council voted unanimously 10-0 on a package of FY2025 tax and appropriation measures after a public hearing and discussion of rising residential valuations and outreach about an owner-occupied exemption. The council approved adoption of a minimum residential factor (0.765982) to permit a split rate, reinstated a 25% residential homeowners exemption and authorized appropriations of $10 million from free cash to reduce the tax levy, $2.1 million from the Water/Sewer fund to offset rates, and $146,000 from the ECTV fund balance.

City Assessor BJ Devereaux told the council the hearing had two purposes: to consider the residential exemption and to propose a shift in tax burden among property classes. "The residential values are definitely rising at a much quicker pace than the commercial, industrial and personal property values. That's adding more of a burden onto the residential properties," Devereaux said, explaining that faster residential valuation growth drives higher residential shares of the levy even when the overall levy remains the same.

Devereaux described the mechanics councilors were voting on: once properties are classified and certified by the Department of Revenue, the council signs the LA-5 form acknowledging excess levy capacity and may choose a single rate or a split rate. He said, using the maximum allowed shift, residential taxpayers' share of the levy could fall from 76% to about 58% while commercial, industrial and personal property would increase from 24% to about 42% of the levy.

Public commenters urged clearer outreach about the homeowners exemption and raised concerns about impacts on local businesses. "I've yet to receive any kind of notification about the owner-occupied exemption," Stephanie McCullough, a two-year Everett homeowner, told the council, and said she opposed shifting burden to commercial properties because "Everett's commercial taxes are higher than Chelsea, Malden, Revere, and Lynn." The city assessor and staff said the exemption requires ownership and occupancy as of Jan. 1, 2024, and that the assessor's office sends notices and can produce limited multilingual mailings but does not run a mass multilingual mailing at present.

Residents also pressed the council about use of free cash and the city's revenue from the Encore Boston Harbor host agreement. Finance staff said the community host (121A) receipts are budgeted as general fund revenue and estimated the Encore-related revenue at roughly $28 million, which offsets the levy and would otherwise raise the tax rate by about $2 per $1,000 without that revenue.

On the council floor, members discussed fairness across small-scale multilong properties and large apartment complexes and noted statutory limits on how the council may tier rates. Several councilors expressed support for reinstating the homeowners exemption as a retention incentive for owner-occupants. After discussion, the council voted on favorable action and approved the measures with roll calls recorded for each item: the classification and minimum residential factor (Item 1), the 25% homeowners exemption and residential rate (Item 2), the $10 million free-cash appropriation to reduce the levy (Item 3), the $2.1 million Water/Sewer appropriation (Item 4), and the $146,000 ECTV appropriation (Item 5); each passed 10-0.

The actions take effect as administrative steps in setting the FY2025 levy and authorizing the appropriations; staff said residents who believe they qualify for the owner-occupied exemption have until April 2025 to apply and that the assessor's office can provide further guidance. The council adjourned after completing the agenda.