Lynnwood Council Approves Property Tax Hike to Cover Budget Gap

The Lynnwood City Council unanimously voted to increase property taxes on Monday, a decision that is expected to generate an additional $2.2 million in revenue each year. The council approved the use of the city’s full banked capacity as part of the 2027-28 budget process.

Interim finance director Monisha Harrell told the council that the average Lynnwood household owning a home valued at $670,000 will see an increase of $128 in their annual property tax bill starting in 2027. State law permits cities to raise property taxes by 1% annually. When a city chooses not to raise taxes, that 1% accumulates as banked capacity, which can be applied in future years.

Mayor George Hurst included the tax increase in his proposed budget presented in September. Harrell noted that without the revenue increase, the city would likely need to implement further layoffs, as approximately 70% of city expenditures go toward staff costs. Last year, the council voted to use only part of its banked capacity, raising taxes by 24% rather than the possible 53%.

The tax hike addresses financial shortfalls that have persisted since 2025. Former Mayor Christine Frizzell announced a deficit of more than $20 million that year due to lower revenues from sales tax, development, and red-light cameras. Although Hurst stated in March that the city had eliminated the gap through layoffs and service reductions, the city reported a $2.2 million general fund deficit from 2025 in July. Preliminary numbers in September indicated a $21 million deficit for the 2027-28 biennium.

To close the gap, the mayor has since laid off 14 staff members and eliminated several vacant positions. Frizzell had previously laid off nine employees in 2025. Council members on Monday said the tax increase provides time to make structural budget changes over the next two years. Council member Robert Leutwyler said the city has held back as long as possible and that the vote is the right move for the community.

Residents may also see additional tax increases from a South County Fire bond that appeared set to pass as of Tuesday. City staff plan to publicize the Snohomish County property tax relief program, which offers exemptions to some seniors and people with disabilities. The county public utilities district and the city of Lynnwood also offer bill assistance programs for income-qualified households.

Council President Nick Coelho acknowledged that rising rates are difficult for residents but said creative policy solutions exist. The council also voted in September to repeal a 2027 utility rate increase, though that change did not affect the general fund deficit. Final budget approval is scheduled for Nov. 23.

The council also appointed Jamie Carnell as the new finance director. Carnell spent 31 years with the city of Seattle, serving as its finance director from August 2024 to January 2026. City Council Vice President Derica Escamilla said the city gains a director with experience larger than the city itself.