State funds new MLT library roof and HVAC system, but not all news is good

The 2026 Washington State legislative session brought good and bad news to Mountlake Terrace at the Thursday night City Council meeting. The state delivered the final $300,000 for the $800,000 library roof and HVAC system project. The state provided $500,000 last session.

And, if all goes according to plan, the 2027 legislative session could deliver some money for the Lake Ballinger Center’s new roof and HVAC system. 

Mountlake Terrace’s state legislative lobbyist Shelley Holder shared the information via Zoom as part of her comprehensive recap.

“If I were better prepared, I would have the confetti and balloons popping up on the screen right now,” Mayor Steve Woodard said. 

It was “not a terrible session,” Holder said, but there are real financial challenges for all local governments, like Mountlake Terrace.

“There were no additional resources distributed to cities, nor was there relief from the obligations and demands placed on city budgets,” Holder said. 

Those financial obligations include the City’s increasing liability insurance. All government agencies are self-insured. At the state level, a full $1 billion of the $80.2 billion state operating budget goes to addressing insurance claims against the state. In Mountlake Terrace, those costs have increased drastically as well. My MLT News wrote about state obligations here and here as part of our Government and You series earlier this year. 

In better news, Holder said, the state did not cut into the shared revenues, such as revenues from taxes like liquor and cannabis that are shared with local governments, as deeply as it could have during a tough budget year. My MLT News wrote about those here. 

The other wildcard legislation was the “millionaires’ tax” signed into law March 30.

The law creates a 9.9% tax on annual income more than $1 million for individuals and households. The law puts $200 million into a “local government fiscal health” account inside the general fund. Local governments include counties, cities and transit agencies. Detailed plans for how that money will be allocated or spent are not yet fully clear. 

Also, the new law eliminates some existing local taxes to create a benefit for non-millionaire taxpayers.

“They made it very clear they wanted to offset that with a reduction in taxes for the average Washington resident on sales tax, something everyone pays,” Holder said. 

But local governments balance current local budgets with those taxes. 

“These will impact our sales tax revenues, but by how much, we don’t know. The Department of Revenue is performing the analysis now,” City Manager Jeff Niten said in an email about the fiscal impacts. 

The ‘millionaires’ tax’ takes effect Jan. 1, 2028. Legal challenges to the law have already been filed. The 2027 legislative session could bring more change to the scenario. They could “make adjustments to that amount and how money is distributed since there was no direction,” Holder said.

Other state funding news included an increase in the Public Works Assistance Account through grants and borrowing capacity and an additional $55 million for low-income, first-time homebuyers. That money is distributed statewide.

Looking to the future, Holder said, state legislators recognize that insurance liability and public defense costs must be addressed. Proposed bills in the 2026 session started that process and, Holder said, progress is likely before January 2027, the start of the next session.

She also offered advice to councilmembers and the public. “Express sincere gratitude to the 32nd [District] legislators: Sen. [Jesse] Solomon, Rep. [Cindy] Ryu and Rep. [Lauren] Davis. They signed up to be legislators. So I would have acknowledged that they signed up for the job, and it’s a very difficult job.”

Invitation to Denmark 

City of Shoreline’s Economic Development Director Nathan Daum shared an invite from Denmark’s ScanDesign Foundation to join the City of Shoreline on a learning tour this summer. The foundation seeks to further environmental sustainability and build relationships between the U.S. and Denmark. 

“Shoreline was encouraged to connect [with other cities],” Daum said, “to create more thoughtful regional partnerships.” With light rail, housing and urban design alignment, Daum said Mountlake Terrace is a good potential partner. 

Several Shoreline city leaders will do the one-week trip. Mayor Woodard and Niten said the council can discuss Mountlake Terrace participation at the next council meeting. 

Internet connectivity

Public Work Director Gary Schimek asked the council to approve a franchise agreement with local fiber provider Forged Fiber 37. The agreement covers how the company will do its physical work within the City of Mountlake Terrace. The company is a subsidiary of AT&T and connects networks to home-based systems using fiber or broadband technology. 

Councilmembers asked if the City had a say in how much residents would be charged or whether the company could provide more access to low-income residents. Shimek said Forged Fiber 37 increases the options for local residents, which could lead to more competitive rates. Shimek said he would ask Forged Fiber about other City requests. 

City manager’s report 

Twenty-six people attended the spring Community Academy, the City’s program to educate residents about city government. It began March 4 and runs for two hours every Wednesday night for six weeks. Niten said residents enjoyed watching the drone presentation as it zoomed into the Space Needle, 12 miles away. 

The Community Safety Series also went well. The next series on permitting and code compliance begins May 4. Get more info here. 

New faces

Mountlake Terrace has a new Community Development Director. Brooke Eidem worked for the City of Snohomish as planning director. The previous director, Christy Osborn, retired last February.