EVERETT — A $3.4 million Business & Occupation tax breezed to a 6-0 passage by the Everett City Council that will simultaneously funnel upwards of $2.9 million to a proposed professional sports and music concert venue and address an estimated $7 million 2027 budget shortfall.
Everett’s 2026 B&O tax collection dipped by $1.7 million with the existing brackets. The new B&O tax brackets for 2027 will hike rates on manufacturing, wholesaling, and service-related businesses while dropping B&O tax rates on gross receipts for small businesses like restaurants, bars and retailers by 25%. The combination of increases and decreases is designed to generate $3.4 million.
As the B&O tax package came up for vote at the City Council meeting tonight, only one councilmember, Paula Rhyne, offered any comment, saying, “I’m really excited to see this come forward. These B&O rates have been stagnant for the last 20 years, while Everett has not. Updating and reforming our rates to reflect the current state of Everett’s industry and economic climate is important for fairness as we move forward.”
Speaking crisply from what appeared to be a prepared statement, Rhyne continued, “Changes to the rates mean Everett means business in more ways than one, and I’m especially thrilled about the relief for our small businesses, increasing the reporting threshold to reduce the squeeze and also the thoughtful reinvestment in our local economy that will come with these adjustments to help keep this economic inertia moving forward,” and concluded, “so happy to be a ‘yes’ vote today.”
Councilmembers Rhyne, Erica Weir, Ben Zarlingo, Judy Tuohy, Luis Burbano and Don Schwab all voted ‘yes’ to pass the B&O tax update. Councilmember Scott Bader was excused from the meeting and not in attendance. The changes will go into effect January 1, 2027.
An ordinance to streamline lot-splitting, in accordance with a 2025 state law, HB 1096
codified as RCW 58.17.145, aimed at encouraging more housing construction, also passed 6-0 at tonight’s Everett City Council meeting.
Everett Planning Director, Yorik Stevens-Wajda, addressed the Council before the vote providing some background to the zoning change, “We’re updating our procedures around land divisions, which is the process by which a piece of property is split into multiple parts that can each be sold to a different owner. Those different types include subdivisions, short subdivisions, unit lots, subdivisions, and unit lot short subdivisions.
“The intent of the update is to implement recent state legislation around lot splitting to implement policies out of our Everett 2044 comprehensive plan. Modernize land divisions for ‘middle housing’ and overall streamlined procedures and development standards. We’ve reorganized four chapters into one chapter with articles, removed a requirement for gaps and encroachments to be resolved, removed a requirement for the installation of access landscaping, utility stubs, and recreation facilities to be installed and inspected before any piece of the subdivided property could be sold.
“Those can now be conditioned on the face of the platt and then delivered, along with any building permit that would occur subsequent to the land division. Propose reducing the standard minimum lot dimensions for the neighborhood residential and UR-4 zones, including minimum lot area from 5000 square feet to 2000 sf and minimum lot width from 50 feet to 25 feet and minimum lot depth from 80 feet to 60 feet. That is one that is the subject of amendment sheet two, which would instead reduce that to 55 feet to account for imprecise platting of our most common lot size in Everett, which is 120 feet deep by 25 or 50 feet wide, and we wouldn’t want to leave out potentially a large number of properties that were just shy of 120 (feet), which is exactly two times 60.
“Planning Commission recommended approval by resolution, and the two amendment sheets number one just corrects a code reference to point to the right place, and then number two is that reduction in the minimum lot size. Our development regulations and the stuff (measures) that we passed in Everett 2044, regulates how we do the three-dimensional development where buildings can go and what the building looks like. It’s bulk and everything. This is just aligning the two-dimensional ownership structure underneath it and is designed to facilitate fee simple, home ownership. No change to where buildings can be built. As a direct result of this, its all about the ownership.”
Rhyne asked, ” Are we the first to do this?”
Stevens-Wajda affirmed that, saying “We’re the first (city) that I’ve heard of.”
The State Department of Commerce, Stevens-Wadja told the Council, previously advised Everett that their proposal was compliant with the 2025 state law.
Zarlingo called attention to the trade-offs involved in the lot splitting law, “As I understand it, Everett is doing some things or compelled by the law by the state law to do some things that other communities are not. Can you speak a little bit to the difference between whatever it is doing and what other communities will be compelled to do?
Stevens-Wajda responded, “The lot split ordinance…actually did not require a lot of changes from Everett. So, I think in a previous meeting, we said a lot of this was voluntary and was actually set into motion by policies and actions and our comprehensive plan and some expressions from this Council on supporting home ownership and streamlining all aspects of the development and land division process.
“Some of the things that we’ve done that are not in the state law are these deferred installation of improvements, which can allow for one important use case would be if someone is interested in selling their backyard or an unused portion of the property, but they don’t want to develop it or have anything to do with that part, so someone could then purchase it and go ahead and move forward with the development, independent of the person who formerly owned it.
“That’s something that we’re doing. The reduction in the standard minimum lot size, and that may sound dramatic, and I was on a phone call with a community member just before this meeting, explaining it that that doesn’t mean that there’s going to be more development closer to someone than there otherwise would have been. It just supports a more simple form of ownership and land division, so that’s something that’s not in the (state) bill.
“So those are some of the things that we’re doing that are kind of beyond what the state requires. We’ve already taken a lot of those steps through rethink zoning, primarily with land divisions where we had had a pretty streamlined process. There are a lot of cities where even to do a relatively small subdivision, you need to have public hearings and takes a long time, even maybe a trip to the Hearing Examiner or even Planning Commission in some cases. So, the lot split bill at the state level was designed to streamline those procedures for just splitting one lot into two.
“We’ve tried to bring some of that streamlining of land division up through the short plat world, which is up to nine lots. So, I think that does put us near the forefront for land divisions.”
Zarlingo added, “The reason I raised it is, I want our community to have context in this, because as I said earlier, these are trade-offs. This is something that will have impact on the neighbors, on the neighborhoods and their character, and I want to explicitly recognize that, but also to say that this is in the absence of condominium developments, of which I think there are zero in Everett and or in Snohomish County and have been for maybe several years, our opportunities for ownership and gradual density is going to be more of this kind of thing. That, along with smoother processes should help that. So, there’s a payoff to the trade-off, and I guess I wanted to be clear about that.”
The lot splitting bill would not apply to areas of Everett subject to homeowner associations and covenants. It does not override those, according to Stevens-Wadja, “That goes for basically everything that we do. If there’s a covenant that says no more than one dwelling unit per lot, then that’s it. If it says no lot smaller than some thousand square feet, then that’s it and the city cannot override that. We provide the ability if others or underlying legal agreements with your neighbors allow.”
Schwab offered another aspect of the lot splitting update, “One point I want to make was that one of these provisions, if somebody does have a lot that they can split, this allows them to split it and then put the onus on the person that purchased the property to develop it out–put the sidewalks in and the utilities. So, you won’t need a lot of upfront money to develop, subdivide your lot. And I think that’s really one important part here. Because it can’t be very expensive for an individual homeowner. Working class homeowner to subdivide their lot.”
Two amendments passed 6-0 to modify the final lot splitting ordinance which also passed unanimously.