The Plan Balances Community Needs and Supports Low-Cost Family Fun
After seven meetings spanning five months and more than 25 hours, the 25 member Citizen Budget Committee submitted a Budget recommendation for the approval of City Council that responds to community-identified priorities for library service and family activities.
The work of the Budget Committee began in January 2024 with a presentation on the Five-Year Forecast focusing on the Transportation, Utility and General Funds. That presentation set the direction for the work of the committee recognizing that:
- To recommend a budget that adheres to the Council Fund Balance Policy, reductions are necessary this year, and
- To ensure the ongoing delivery of programs and services, new revenue is needed on an ongoing basis.
The City Council has an adopted fund balance policy (C-11) of 15% of budgeted revenues in the General Fund. This allows the City to pay for expenses from July to October when the City begins to receive property tax revenue from the counties.
While the Five-Year Forecast set the stage, the City Manager’s FY 2025 Proposed Budget was the starting place for the committee’s deliberations. The City Manager’s Proposed FY 2025 Budget reflected the Five-Year Forecast and identified more than $4M in reductions. Those reductions impacted services highly valued by the community – library, parks, youth, seniors, and public safety.
“Over the course of their deliberations, the Budget Committee grappled with the hard reality of balancing the needs and expectations of the community, Council Policy, and declining revenues. Advocates for the library, police and vulnerable communities came out to support maintaining services. Other members of the community advocated spending reductions. The Budget Committee navigated a difficult process and challenging conversations with grace. The Committee did excellent work, and there are still difficult decisions ahead of us. I want to sincerely thank the committee and the community for their time, their commitment to our city, and their willingness to have difficult conversations.”
“Next year, we will face an even larger deficit. We need to increase revenue, or the reductions will be more severe. I encourage everyone who expressed support for City services and programs to stay engaged in the conversation,” reflected City Manager, Keith Stahley.
After long deliberations, the Budget Committee relied on one-time funds (General Fund and Cultural and Tourism Fund working capital) to restore services identified for reduction.
Ultimately, the Budget Committee approved a FY 2025 Budget to send to the City Council. Their recommendation:
- Included an expenditure budget of $727.6 million across all City funds.
- Restored some proposed General Fund reductions using one-time funding:
- 7.25 positions at the Library – maintaining current hours
- Movies in the park, concerts in the park, and the 2025 Kids Relay
- Irrigation, water fountains, splash pads, and restrooms at neighborhood and community parks
- One graffiti abatement position for the Police Department – maintaining the two current positions
The Salem City Council will hold a public hearing on the budget on June 10 and is scheduled to vote on adoption at their June 24 meeting.
Background
The City of Salem has faced General Fund budget challenges for well over 20 years. The challenges of a “systemic imbalance” continue to worsen due to the reliance on property tax revenues that were capped by constitutional amendments, Measures 5 and 50. The property tax system in Oregon is broken. The enduring impact of these measures is that they limit the growth of the taxable value of property and set permanent tax rates
The City of Salem cannot increase property taxes to keep pace with population growth and escalating costs.
Without a revenue source that keeps pace with escalating costs, we cannot continue to deliver services at the same level. Just like all our budgets, when the cost of groceries and gas increases – we reduce spending in other areas.
During COVID-19 the US Government offered multiple financial relief packages. This influx of money postponed our financial challenges temporarily. Now those programs have ended, and Salem is returning to the same budget challenge we had in 2019. Without added revenue, increasingly difficult cuts will need to be made.
