The Salem City Council approved its fiscal year 2025-26 budget, which includes a 2 cent decrease in the real estate tax rate and a raise for employees, upon first reading Monday.
The city鈥檚 total $244.55 million budget includes its general, water, sewer, civic center, catering, electric, debt service and schools funds. The council adopted a real estate tax rate of $1.18 per $100 of assessed valuation for fiscal year 2026 鈥 a 2 cent decrease from the prior year.
However, after the city鈥檚 most recent real estate reassessment, the city calculated the effective tax rate increase to be 6.47%. Prior to the 2 cent decrease, the effective tax rate increase was calculated to be 8.28%. The city advertised the effective increase and held a public hearing on it during the meeting Monday.
The budget shows the personal property tax rate and the machinery and tools tax rate as $3.40 and $3.20 per $100 of assessed value, respectively.
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During the budget public hearing, John Breen commended city staff and the council for their work on the budget. The budget this year is much easier to follow and the city seems to have developed a good budget process, he said.
鈥淭his year, we鈥檙e moving in the right direction with a tighter budget and we鈥檙e actually reducing taxes,鈥 he said. 鈥淚 hope that continues for at least the next three years, in both directions.鈥
Included in the budget is a more than $400,000 increase for Salem City Schools and a pay increase of around 4% for all eligible full-time employees. The school system鈥檚 budget includes a cost of living increase 鈥渦p to a comparable percentage as other city employees,鈥 according to the city鈥檚 budget. The city budgeted to hire a maintenance construction worker for its streets department, a building maintenance technician and a grants and special projects coordinator. It changed one librarian position from part-time to full-time to focus on youth services programs.
In the proposed budget, City Manager Chris Dorsey wrote that the city was 鈥渇iscally conservative鈥 with its revenue projections.
鈥淒ue to the nature of the city鈥檚 commercial entities, the prior downturns and upturns of the economy have only had a marginal effect on many of the City鈥檚 revenues,鈥 he wrote. 鈥淭he City of Salem will continue to use the best resources available to forecast its revenue expectations.鈥
Dorsey
The budget funds $617,500 in repairs, replacements and additions to the Salem Civic Center. A little more than $1 million in capital spending will be funded by the city鈥檚 new capital reserve fund, which includes $548,100 to purchase new vehicles for the Salem Police Department.
The Salem City Council will vote on the budget again upon second reading at its meeting on May 27.
The council also voted unanimously for the final approval of developer Alexander Boone鈥檚 request to rezone two parcels at 1906 Mill Lane and the 1400 block of Penley Boulevard to residential single family. Boone plans to build a 70-lot cluster housing development there. The city鈥檚 planning commission unanimously recommended approval of the development in March, and during its April 28 meeting, the Salem City Council unanimously approved the request upon first reading.
The concept plan for the proposed Steelton Mill development in south Salem on Mill Lane.
The two properties combined are around 18.66 acres. Boone鈥檚 request included a special exception permit to include the properties in the cluster housing overlay district, which reduces the minimum lot requirements for each individual parcel.
Steelton Mill, as Boone has proposed to name the development, will consist of up to 70 single-family homes starting in the mid-to-upper $400,000 range, Boone said. Documents in Monday鈥檚 agenda packet state that the project will help expand the types of homes available to current and potential Salem residents.
Boone
