Residents raise questions about long-term plans to fix city budget gap at town hall

A town hall discussion of taxes isn’t often a place for positive emotions.

But despite the tough topic, the energy in Elsinore Theatre Tuesday night matched that of the speakers’ main message of the evening: we’re in this together.

“How many of us in here really love our Salem?” said City Councilor Irvin Brown from the stage, eliciting cheers and whoops from the audience. “We really do.”

The event, hosted by Salem Reporter, aimed to help inform voters about the city’s proposed property tax levy, which seeks to alleviate the city’s budget deficit by raising millions of dollars to keep Salem Public Library employees and hours, and services at parks and Center 50+.  

Hundreds of Salem residents showed up to the theater to talk about taxes. Many sported pins or t-shirts showing love for the library, which is set to face a cut of 23 employees and nearly half its hours under a city budget proposal. Those cuts would be avoided if voters agree to pay more in taxes in the May 20 election.

Speakers included Brown, who chaired the city’s budget committee before being elected to council and brought energy to the event with call-and-response moments throughout his presentation. Other panelists were Salem Area Chamber of Commerce CEO Tom Hoffert and Josh Eggleston, the city’s chief financial officer. They were invited to share information about the city’s budget situation and the impacts of the choices ahead.

“Salem wants to raise your taxes. Come find out why” read the invitation to the community from Salem Reporter Editor Les Zaitz. In his column, he noted that Mayor Julie Hoy declined an invitation to be on stage, as did members of the Budget Efficiency Committee, an outside panel of business and nonprofit experts who reviewed the city’s budget in February. There is no organized campaign opposing the levy.

After presentations from each panelist, Salem Reporter’s Managing Editor Rachel Alexander and reporter Joe Siess asked questions before turning it over to the audience, who submitted written questions throughout the event. Many spoke to the community’s concerns about an uncertain future and rising household expenses.

Eggleston went first, sharing Salem’s budget situation. There’s a $14 million gap expected in the coming year between the city’s revenues and expenses in its general fund, which pays for libraries, public safety, parks, code compliance, planning and city administration and facilities.

Eggleston said the levy would bridge much of the gap between city costs and revenue, making future cuts less likely, but not impossible. He said the city will also have more time to plan for a stable future while the levy is in place.

Eggleston said the issue is largely driven by measures from the 1990s that put limits on the amount of property taxes cities could draw in, causing expenses to grow faster than revenues year after year. 

“This is not unique to Salem. It’s a statewise issue. We’ve worked hard to control costs, prioritize essential services and make the most of the resources we have, but without additional revenue we are facing difficult decisions about which services to continue, reduce or eliminate,” Eggleston said.  

Hoffert pointed to increasing pension costs for city staff as another major driver. Those costs are set by the state.

If voters approve the levy, property owners would pay 98 cents per $1,000 of assessed property value, or about $229 annually for the average homeowner in Salem. Tax rates are based on a home’s assessed value, which is typically about half of its market value. If passed, the city would ask the voters to renew the levy before it expires in five years.

The library has been a focal point of community support of the levy, and the town hall audience drew many supporters, including several staff librarians. But public safety appeared front-of-mind for Brown and Hoffert. 

Though the levy wouldn’t pay directly for police and fire, it would free up money in the city’s general fund to support police and fire services. There are no proposed job cuts for the city’s police and fire departments in this year’s budget, because job cuts would lead to increased expenses through overtime pay, city spokeswoman Courtney Knox Busch told Salem Reporter.

Brown referenced a fire that destroyed a south Salem home on Monday. He said that, due to short staffing, it required much of the city’s available resources at the time. He said 29 of the 41 on-duty firefighters responded to the blaze.

“Had there been a fire in the northeast part of the city, where I live, the response time would have been horrific,” he said. “Public safety does not care if you live on Lancaster or West Salem… public safety does not care if you’re brown, Black, white, rich, poor… when you have a problem, problems come knocking on your door.”

Brown said that if Salem wants better public safety, residents will have to pay for it.

“Madam Governor has not cut a check,” he said, referring to the city’s yearslong efforts to have the state compensate Salem for the state buildings within city limits that don’t pay property taxes. “Nor is she planning to cut a check. She’s not about to swoop down and save the capital city.”

Each panelist pointed to the findings of Salem’s efficiency committee which found that there is no widespread waste happening in the city budget, and that much of its money issues are caused by factors it can’t control. 

The Salem Area Chamber of Commerce, which opposed a city effort in 2023 to impose a tax on workers’ paychecks to fund the same services, has endorsed the levy. The chamber represents over 1,000 small businesses in Salem.

Hoffert said Tuesday night that businesses are now at the table for discussions about the city budget in a way the city hadn’t accommodated in years past. That drew enthusiastic applause from the crowd.

He said the chamber supports making Salem a good place to live and start a new business.

“Our organization believes in a community that is vibrant and healthy. And this investment, out of those that were proposed, is the most palatable and the most swallowable for each of us as residents and businesses, because remember businesses also pay this,” he said.

Hoffert hopes that if the levy passes, Salem will also commit to shop local “to drive our dollars back to the very people that are supporting this community and being risk-takers as business owners,” he said, to prolonged applause and cheers from the audience.

Salem residents will have more chances to weigh in ahead of the May election as the city budget committee discusses the future of Salem’s services. Their first meeting is Wednesday, April 16. See a schedule and information on how to participate here.

There’s still time to register to vote. The deadline is Tuesday, April 29. Voters can register online on the Secretary of State’s website, or at the Marion County Clerk’s Office, 555 Court St. N.E.  Ballots go out April 30.

Below, see a selection of questions from the audience and responses from the panel edited for length and clarity.

Audience Q&A

Q: How do you expect Salem would change if the levy fails and city services are cut as a result?

Hoffert said he’d like the budget committee to prepare two budgets: one which shares the cuts, and an alternative future where the levy is passed.

“You will see a great reduction in people. And where do people in our city reside? They reside in libraries, police, fire, community services, all the things that come together to create a wraparound service for a city,” he said.

Brown said without the levy, it will only get worse in future years.

“You think 20 hours of the library being open is bad? Imagine when we have to close it for good,” he said.

Q: If the levy is passed, do you plan to present or propose a payroll tax in the future? Will there be a separate levy in six months to a year for police and fire?

Eggleston said there are no plans to do either at this point.

Q: What other revenue options is the city exploring beyond taxes?

Eggleston said the city is pursuing a payment in lieu of taxes from the state, an annual payment to compensate Salem for the amount of state-owned land within its borders. Hoffert said any successful effort there would likely come at the very end of the current legislative session in June, when lawmakers put together the so-called “Christmas tree bill” that includes funding for projects around the state.

Eggleston also said the city is restructuring its fee systems and considering stopping some urban renewal funds. When an urban renewal area is created, it freezes the assessed property values inside its boundaries, limiting the amount of taxes the city, county and other local government entities can collect to support new construction. Closing an urban renewal area would leave more money in the city budget for basic services. 

Q: How is this better than a payroll tax?

Hoffert said that the payroll tax would have impacted people earning low wages and would not have taxed retired people. He said it would have dissuaded employment.

“I don’t know that our position was contentious when 80% of the electorate voted it down,” he said.

Contact reporter Abbey McDonald: [email protected] or 503-575-1251.

A MOMENT MORE, PLEASE– If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE.