Doubling down on obfuscation: At the November 4 Council Regular meeting, the Council voted to close the public hearing on the City’s biennial preliminary budget from the mayor for the years 2025-2026. The mayor’s 2025-2026 budget draws down the general fund ending balance, our savings account, from $5 million today, to under $2 million in 2026, and hands off a near $8 million deficit in 2027-2028. When asked, the mayor contended “there is plenty of revenue, I just couldn’t put it in the budget.” To date, neither the mayor nor his administration have presented analysis to prove his budget deficits can be addressed with these, as yet, unrealized potential revenues.
Where is the outrage?
On November 13, over three hundred citizens signed up to complain for hours about potential property tax increases in Snohomish County, yet the very same people, some of whom live in Mukilteo, remain oddly silent when a “fiscally conservative” mayor proposes 15% budget deficits and eviscerates our ending fund balance with no articulated plan to replenish our reserves or balance the budget. When deficits don’t matter when a Republican is creating them or budget cuts are dismissed as “grandstanding” when a Democrat is proposing them, you know you’re dealing with unserious people.
We have no more money
The mayor’s preliminary budget operating deficits are 10% in 2024, 3% in 2025 (with ARPA, without ARPA 15%) and 15% in 2026. I forecast an $8 million deficit in 2027-2028. At this rate, the ending fund balance of $2 million in 2026 will be completely wiped out in 2027.
Recall, the 2026 operating deficit in the mayor’s preliminary budget is $3 million. This deficit will continue to grow as our expenses continue to outpace our revenues. The mayor’s unrealized revenue ideas will neither stem the current rate of growth of the operating deficit, nor replenish the ending fund balance.
The planned annexation will only yield an additional $300,000 a year, starting in 2026. An EMS levy, were it successful at the ballot box in 2025, would only yield $1.6 million per year starting in 2026.
Joining the regional fire authority is a multi-year process requiring a successful ballot measure. On joining, our property taxes will increase significantly because their levy rates are higher. Were the regionalization initiative to ultimately pass, the lengthy process to get there would likely not yield any savings for the city until at least 2027 or 2028. Worse, it would double or triple the property taxes you pay for fire and EMS, and potentially lead to a reduction in service as one of the two stations could be closed for greater network efficiency. Not surprisingly, I believe regionalization will be a hard pitch to sell to the electorate, but it is possible, particularly if we also make cuts and share some of the burden imposed on our taxpayers.
Pay now or pay more later?
We need to rebuild our ending fund balance, so we have reserves to withstand a downturn. In 2008 we had a macroeconomic crisis. Today we have a booming economy. Our budgetary woes are structural, but they are also self-imposed.
We need to follow our own deficit reduction policy, rather than ignore it. When heeded in 2011, the gap policy helped the Council to resolve the operating deficit in 3 years. Today our deficit is nearly double what it was in 2011, yet this time, the mayor convinced this Council to waive the gap policy in 2025-2026 and to ignore it altogether in 2024.
We need to have clear dialogue with the taxpayers about what services they wish to see reduced or what new taxes they might wish to pay to keep them, because the status quo is untenable. Cuts today, though painful, will preserve our strong operating reserves and give us the flexibility to navigate through these uncertain times.
Very respectfully,
Mike Dixon, Mukilteo Councilman
Mike Dixon was elected to a four-year term in 2023. Born and raised in the U.S. Virgin Islands, he has made Mukilteo his home since 2007. Mike is currently a cleantech executive with GM Energy, owns and operates an insurance agency in Old Town, and is a solar farm investor in the Caribbean. Mike is also a three-time elected water sewer commissioner, former president of the Board of the Alderwood Water & Wastewater District, and current commissioner of the Mukilteo Water & Wastewater District. He holds a bachelor’s degree in management science and an MBA, both from MIT.
According to his bio, his council goals are building a cleantech cluster in Mukilteo, developing the waterfront as a commercial and recreational economic hub in the region, marketing Mukilteo as a welcoming and inclusive city, building policy to support the middle class and ensure our city’s sustainability, working collaboratively to ensure strong and robust long term financial planning and annual budgets, and partnering regionally to help Mukilteo remain an inclusive, sustainable, vibrant and growing city.
COMMENTARY DISCLAIMER: The views and comments expressed are those of the writer and not necessarily those of the Lynnwood Times nor any of its affiliate.
Editorial Notes: The article was updated by its author on 7:44 p.m., Saturday, November 16, 2024, to change the word “accept the City’s biennial preliminary budget” to “close the public hearing on the City’s biennial preliminary budget” in the first paragraph.
Author: Lynnwood Times Contributor
