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Council hears 2026 state legislative wrap-up; lawmakers passed ‘millionaire’ income tax bill, staff say
Summary
City lobbyist and staff briefed the Everett City Council on the 2026 Washington legislative short session, highlighting supplemental budgets, local provisos retained for Everett, and passage of Senate Bill 6346—a new income tax on households over $1 million that is likely to face legal and ballot challenges.
The Everett City Council received a comprehensive briefing April 15 from the city’s lobbyist and staff on outcomes from the 2026 Washington legislative session, including budget changes and several policy bills that affect local government finances.
Trevor Justin, the city’s contracted lobbyist, summarized the short session as generally positive for Everett: the legislature passed supplemental operating, capital and transportation budgets and left in place several provisos from earlier sessions that benefit the city, including funding related to street medicine and a previously secured $7.4 million state grant intended for the Everett stadium project. Justin said the supplemental transportation budget increases preservation and maintenance funding and the capital supplemental added nearly $890 million in allocations for housing, water conservation and resiliency work.
The briefing singled out Senate Bill 6346, described by staff as an “income tax” or “millionaire tax.” Under that measure, Justin said, households reporting more than $1 million in annual income would face a 9.9% tax; staff estimated the revenue could be roughly $3.4 billion annually if implemented. The city’s presenters noted SB 6346 does not take effect immediately: implementation and collection would not begin until 2028–2029, and proponents and opponents expect legal challenges and potential voter referenda. City staff emphasized the timing and uncertainty, and said any state revenue would not be available to cities until after those legal and ballot processes conclude.
Staff also described policy outcomes that may affect municipal operations, including changes to state sales taxes and local revenue options that were rolled back or altered as part of the broader package. The briefing addressed a controversial transfer of funds from certain pension accounts into the general state budget (cited in the meeting as House Bill 2034-related movement), and staff described continuing discussion about whether a portion of those state actions might be returned to local pension boards — a change that did not materialize in this short session.
Other bills mentioned: a regional housing bill (Senate Bill 6026) supported by the city, a step-housing bill encouraging supportive and transitional housing (House Bill 2266), an automated license-plate reader law that passed with revised public-records provisions (Senate Bill 6002), and a condo-warranty measure (SB 2304) intended to increase protections for smaller condo projects. Staff also described that significant public defense reform proposals (House Bill 1592) did not advance this session but remain under discussion.
Councilmembers asked how new state allocations and revenue changes might affect Everett’s capital priorities and whether Everett’s bridges and local projects could be prioritized under the state’s preservation funding. Staff recommended ongoing coordination with WSDOT and noted the state will develop a prioritization list with the new funding. Councilmembers also asked about the distribution and timing of revenues if the millionaire tax is implemented and the potential severability of repealed or altered tax provisions in litigation or referendum contexts.
City staff and the lobbyist encouraged Council to anticipate further budget and policy developments in the 2027 long session and to continue regional advocacy. No Council action was required on April 15; staff said they will continue tracking implementation timelines, legal challenges and potential local impacts.
