Everett residents and the roughly 670,000 people across Snohomish County who drink the city's water are now paying a doubled utility tax that took effect Aug. 1, closing nearly half of a $15.3 million budget deficit for the city.

The Everett City Council voted 6-0 on May 27 to replace a 6% "payment in lieu of taxes" fee on water and sewer service with a 12% utility tax. The change generates an estimated $7.5 million annually for Everett's general fund, which pays for police, parks and other city services, according to interim finance director Mike Bailey's presentation to the council in May.

The prior 6% fee had been in place since 1983. Everett was one of the few water providers in Washington still using a payment fee rather than a utility tax; several cities in the state charge water utility taxes between 10% and 15%, snoho.com reported.

"My challenge to someone is that if people do not want us to do this, find $7.5 million in the city budget," Councilman Scott Bader said at the May 27 meeting when the council approved the measure.

What Everett residents pay

For customers inside city limits, the utility tax combined with rate adjustments raises the average monthly utility bill by about $12 starting with September 2026 bills. The average total monthly bill will be $168.20.

Ripple effects beyond Everett

Because Everett supplies drinking water to approximately 75% of Snohomish County, the tax increase flows downstream to wholesale customers who have no alternative source. The city's four largest wholesale buyers are the Alderwood Water District, the city of Monroe, Lake Stevens PUD and the city of Marysville.

Alderwood in turn sells water to the city systems of Lynnwood, Mountlake Terrace and Edmonds, plus water districts serving Mukilteo and Silver Lake, and directly services Mill Creek and Bothell.

At the May 27 council meeting, Alderwood Water District attorney Joe Bennett called the change "a pure case of taxation without representation," arguing that customers outside Everett cannot vote in Everett elections. Deputy city attorney Ramsey Ramerman responded that the city attorney's office had outside attorneys review the measure and concluded it does not violate that principle. Bennett alluded to possible legal remedies.

The city of Snohomish, which buys water exclusively from Everett, was considering an "Everett passthrough" rate adjustment as early as its Tuesday, Aug. 18 council meeting, according to snoho.com. City administrator Ken Klein said the passthrough would add roughly 6% on top of Snohomish's already-scheduled water rate increases. Snohomish's monthly wholesale water purchases from Everett ranged from $73,249 to $143,114 in late 2025.

What's next

Mayor Cassie Franklin said at the May 27 vote that utility taxes are common across Washington state. Whether Alderwood or other wholesale customers pursue legal action remains an open question. Everett's 2027 budget still carries a roughly $7.8 million deficit even with the new revenue in place.