Both ideas are under consideration as possible revenue solutions to address a $13M budget shortfall.

EDMONDS — Businesses in Edmonds could pay a city tax by early next year and people patronizing shops and restaurants could be required to pay for parking under proposals being studied by the Edmonds Economic Development Commission.

The nine-member commission voted unanimously during a special meeting Wednesday night to continue to examine the plans and decide whether or not to recommend one or both proposals to the city council by early November.

The volunteer advisory commission provides advice and recommendations to Edmonds city officials on economic vitality, jobs and enhancement of municipal revenue. It had not meet since last November because its meetings were suspended due to the Edmonds budget crisis.

The city faces a $13 million shortfall in the current 2025-2026 budget.

Voters already will have to decide whether to approve a ballot measure in November on a $14.5 million additional property tax levy lift as the city looks to shore up its finances. That would cost the average homeowner, based on a median-valued house of $840,200, $63 more in taxes per month.

City council members said in a draft resolution passed on June 10 that without the measure’s approval drastic cuts would have to be made. The resolution said that the Edmonds Human Services Department would have to be completely eliminated along with the city’s cultural service program.

Significant cuts would also have to be made to a number of other departments, including police, parks and recreation, and community and economic development.

To what extent, however, implementing a business tax, known as a Business and Occupation Tax, or imposing parking fees would have on the budget shortfall is unclear, said Edmonds Director of Community Service and Economic Development Todd Tatum at Wednesday’s meeting.

He said informal city estimates on revenue from implementing parking fees have ranged from $250,000 to $1 million a year but its unclear how much it would cost the city to install meters, build a parking garage or pay workers to enforce the parking regulations.

Currently, Tatum said, the the city doesn’t enforce three-hour daytime parking limits downtown because it doesn’t have the money to pay workers to do so.

At Wednesday’s meeting, several business owners spoke out against the business tax proposal.

Any attempt to create a local Business and Occupation tax that charges businesses more than 0.2% on their gross receipts must go before voters, Tatum said.

Erika Barnett, who co-owns two locations of the Salish Sea Brewpub in Edmonds, objected to the tax proposal.

“The tax is based on gross receipts not profits,” she said. “That means a small business making two million in gross revenue a year with 30 employees, insurance, rising costs of goods, pays the same as a cconsulting firm with almost no overhead. That’s fundamentally unfair and disproportionately hurts the business of Edmonds that we claim to support.”

Barnett, who is running for city council, said she was speaking not only for her business but dozens of other small Edmonds businesses who are “shocked and frustrated,” about the tax proposal.

Kurt Campbell, c0-owner of Campbell Volkswagen in Edmonds, said the combined state and city 10.5% sales tax in Edmonds is already driving away customers from his dealership to Burlington in Skagit County where the sales tax is 8.7%.

He said said additional tax on his business means higher costs that could impact customers.

“This is a regressive tax and it’s not going to help,” he said.

Ryan Crowther, president and CEO of the Edmonds Chamber of Commerce, said many businesses in Edmonds are already hurting.

“I think small business are struggling more than people realize,” he said. “I would encourage you to talk to them.”

Crowther said he realized the difficult financial picture the city was in.

Several members of the commission said they feared that the businesses would pass the tax on to consumers who would then choose to shop in Lynnwood down the road on Highway 99, which has no such tax.

Tatum said if the city council votes to accept any recommendations from the commission, the soonest they could be implemented is early 2026.

He said the city would have to put the measures in place in December if it wanted to have an impact on the city’s mid-biennium budget modification.

Randy Diamond: 425-339-3097; randy.diamond@heraldnet.com