The Everett City Council met in special session Monday night to adopt a new tax rate and set the differential between the residential and commercial property tax rates. Following a brief explanation by Chairman of the Board of Assessors Bill Hart, the Council set the minimum residential factor (MRF) at 1.75%, but even with the so-called “split rate” residents and business owners are both likely to see their overall tax bills increase slightly in the coming year.
According to Hart, the estimated residential tax rate for 2016 dropped from $14.61 per thousand dollars of valuation in the current year to $14.45 per thousand in the coming year. Additionally, commercial and industrial property tax payers will also see their rate drop in the coming year from $39.455 per thousand to $37.98 per thousand.
According to Hart, the tax levy at the proposed rates would set the tax levy for the coming year at $93,653,216, an increase over the current year’s tax levy of $90,369,956, but still more than $5.8 million less than what the city could have proposed to raise through property taxes.
The city’s tax levy limit for 2016 is actually more than $99 million. However, Mayor Carlo DeMaria and the Assessors chose not to recommend raising the levy to the allowable limit, in an effort to only tax to the level needed to maintain city budgets and continue operations.
Hart also reminded the Councilors that the city has planned to offset a small portion of the tax levy increase, by utilizing some of the city’s unexpended fund balance, also known as free cash, to offset the tax levy.
In short, the city used $1 million of free cash in the budget, so that it could raise $1 million less through taxation in the coming year.
The council vote was made to accept the minimum residential factor of 1.75%, and accept the proposed tax levy as suggested by the Board of Assessors. Based on those votes, as long as the Department of Revenue accepts the city’s calculations, the new residential tax rate for 2016 will be $14.45 per thousand and the CIP (or the tax rate for commercial industrial and personal property) will be $37.98 per thousand.