Everett residents and Snohomish County water customers could see their monthly bills increase by nearly $11 starting July 1, 2026, if the Everett City Council approves a proposal to double the city’s utility tax rate on water and sewer services.
The proposal, which the council is expected to consider through three readings beginning in April, would replace the existing 6 percent “payment in lieu of taxes” (PILT) fee with a 12 percent utility tax on water and sewer. That change would raise approximately $7.5 million per year for the city’s general fund — closing about half of a projected $14 million budget deficit the city faces heading into 2027.
What It Means for Your Water Bill
For the average Everett water customer, the tax increase would add roughly $10.74 per month in additional charges. The city’s current 6 percent fee has been in place since 1983 — more than four decades without adjustment. City officials argue the updated structure better aligns with state law that explicitly allows municipalities to levy utility taxes.
“Our tax will be embedded in wholesale water costs, and then other cities can do what they will with their utility taxes,” City Finance Director Mike Bailey told the Everett Herald in March.
The change affects more than just city residents. Everett’s water system serves approximately 670,000 people — roughly three-quarters of all businesses and residents across Snohomish County. Communities that purchase wholesale water from Everett will see the tax embedded in what they pay Everett, and those cities may then choose to layer their own utility taxes on top of that wholesale rate.
Over 180,000 sewer customers would also be affected.
Why Everett Faces a $14 Million Gap
The budget shortfall is not a sudden emergency — city officials have been working to address a structural revenue gap that grows as demand for services increases while traditional revenue sources remain flat. Mayor Cassie Franklin addressed the issue directly during her March 2026 State of the City address, telling residents: “We cannot cut our way to a sustainable future.”
Options the city has evaluated to close the gap include regionalizing library or fire services and pursuing a targeted property tax levy lid lift. The utility tax approach has gained traction because it does not require voter approval, can be implemented relatively quickly, and taps into a revenue source the city’s legal department says is clearly permitted under Washington state law.
The new tax would close approximately half the projected $14 million deficit. City officials have not yet publicly committed to a specific plan for closing the remaining gap.
Low-Income Customer Protections
City officials have indicated they plan to expand utility payment assistance programs for income-qualified customers before the tax takes effect. No details about the expanded program have been released publicly as of publication.
What Happens Next
The Everett City Council is expected to hold its first reading on the utility tax ordinance in April 2026. Under standard council procedure, an ordinance requires three readings before it can be voted on for final approval. If the council approves the measure on its current timeline, the 12 percent rate would take effect July 1, 2026.
No council vote has occurred yet. Residents who wish to weigh in can attend council meetings held at 6:30 p.m. Wednesdays at the Everett City Council Chambers, 3002 Wetmore Ave., or submit comments through the city’s official website at everettwa.gov.
Frequently Asked Questions
What is the current utility tax rate in Everett?
The city currently charges a 6 percent fee described as a “payment in lieu of taxes” on water and sewer services. This rate has been in place since 1983.
How much more will I pay each month?
The city estimates the average customer will pay approximately $10.74 more per month if the 12 percent rate is approved.
Do I have to be an Everett resident to be affected?
No. Everett’s water system serves approximately 670,000 people across Snohomish County — roughly three-quarters of the county’s residents and businesses. If your community buys water from Everett, you may see the increase reflected in your bill.
Does this require voter approval?
No. A utility tax does not require a public vote. The Everett City Council has authority to approve it through the standard ordinance process.
When would the new rate take effect?
The proposed effective date is July 1, 2026, pending council approval.
Will there be assistance for low-income customers?
City officials have stated they plan to expand utility payment assistance programs before implementation, but details have not been finalized.
How much money will this raise?
The city projects the 12 percent utility tax would raise approximately $7.5 million annually toward the general fund.
Why does Everett have a budget deficit?
The city faces a projected $14 million budget shortfall in its 2027 general fund. Mayor Franklin has said the city cannot solve the gap through cuts alone and is pursuing new revenue strategies.
Go Deeper: We’ve published detailed knowledge nodes expanding on this story for specific Everett audiences:
