Kathy Knock has been selected to serve on the City's 2024 Revenue Task Force as the employee representative.

The purpose of the revenue Task Force is to explore new, additional revenue sources and adjustment to fees to sustain those services that do not have a dedicated revenue stream. The meetings will be held once a month through June 30, 2024 and are open to the public. The task force is charged with making recommendations to the City Council in early July. The City is required to have a balanced budget. While the Revenue Task Force considers additional revenue options, the City's Budget Committee will be reviewing spending cuts. 

Ways you can participate

Task Force Meetings

Meetings will be held about once a month. 

• April 25, 2024 - The meeting materials focused on the results of the town hall meetings and the community survey.  The remainder of the meeting was a "deeper dive" discussion of the previously identified high-interest revenue options. While the materials included a discussion about the medium-interest options, the task force did not have time to review those to determine which, if any, should be discussed further.
  • Community Input Take-aways:
    • Interest in revenue options that do NOT significantly impact the local economy.
    • Prefer user fees/fees for service and business taxes, with some acceptance of a dedicated local property tax levy.
    • The service area with the greatest support is fire service.
    • Homelessness remains the top community concern. 
    • High interest in funding services to keep up with population growth and potentially expand services.
  • Task force members noted inconsistencies such as not wanting to impact the economy, but wanting businesses to bear the burden of new revenue. Overall, the impression is that the community wants all possible service from the City and expects someone else to pay for it.
  • Russ Beaton made a presentation regarding using a personal income tax to fund the City's services in a way that might also allow the City to "reform" tax collection.
    • Lowest earners (0-70K adjusted gross income) would pay no tax.
    • Highest earners (500K and above adjusted gross income) would pay 8% (on top of 9% federal income tax)
    • Total collected under this model would be $112 million. 
    • Income categories and amounts of taxes modeled were provided as discussion starting points.
    • Implementation would take one to two years with actual funds collected a year later. 
  • The task force has three remaining meetings, 6-9 hours to debate and develop a revenue recommendation for the City Council's July 2024 meeting.
    • If the City does not collect millions of dollars in new revenue before July 2025, City services will need to be cut next spring during the fiscal year 25-26 budget process.
    • Page 16 of the 2025-2029 five year forecast outlines potential cuts for next year:
      • One fire station (nine firefighters)
      • 12 police officers/staff
• March 18, 2024
  • Reviewed the focus group findings (101 participants in all 8 wards):
    • The community is interested in clearer:
      • Demonstrations of trade-offs in the current budget conversation
      • Information about the source, or reason, for the current budget shortfall
      • Information regarding what the state, county, and city pay
      • Communications from the city regarding Salem’s unique struggle with institutional property burden (heavy presence of non-property tax-paying institutions)
      • The essential question: if you raise money, how will you spend it?
    • Safety includes vibrant parks, thriving businesses, and safe places to walk and ride bikes.
    • Concerns about City infrastructure
  • Develop a decision framework, comparing the task force member views with the focus group views:
    • Removed "Use in peer cities" as a decision criteria
    • Added "Estimated revenue potential" and "Impact Timeline" 
  • Begin narrowing the revenue options to be explored
    • Moved the following revenue options into a separate legislative packet since they cannot be enacted without state legislation:
      • Local Marijuana Tax Increase
      • Payments in lieu of taxes from county and federal buildings
      • Payment in lieu of taxes from the state government
    • High-interest options to be explored in more detail:
      • Business License Fees
      • A1 Annex developed areas within the Urban Growth Boundary
      • Local Option Property Tax Levy
      • Corporate Income Tax
      • Intergovernmental agreements and entities outlined in ORS 190
      • Personal income tax
      • Property tax on vehicles
    • Low-interest options not moving forward for further discussions at this time:
      • Land value tax
      • Tolls on Marion Street or Center Street Bridges
      • Payroll Tax (Employee-Paid)
      • Solid Waste Collection Fee
      • Street Lighting District
      • Bicycle Registration Fee
      • First Responder Fee
      • Rental Housing Fee
      • Sweetened Beverages Distributor Tax
• February 22, 2024
  • Reviewed revenue targets - The consultant presented three revenue targets to help define the scope of the gap:
    • Retention - maintain current staff levels, recognizing that services will continue to face costs as costs go up.
    • Maintain service levels - Add staff as needed to match population growth
    • Shelter services - Raise the revenue needed to continue providing shelter services.
  • Recommendation from task force: Raise enough revenue to restore staffing and services to the pre-2008 recession level, maintain those services as the population grows and continue the shelter services.
  • Initial review of revenue options.
  • Public Town Halls scheduled
    • April 10, 6:30-8:30 pm in South Salem, Baxter Hill Community Hall, 1780 Baxter Road SE
    • April 16, Virtual
    • April 23, 6:30-8:30 pm in North Salem, Center 50+, 2615 Portland Road NE
• January 30, 2024
  • Reviewed what the problem is and how we got here - primarily the impacts of Measures 5 and 50, restricting property tax collections for all local governments.
  • Reviewed the three options considered by the last Revenue Task Force:
    • Increase City Operation Fee
    • Local option levies (somewhat limited by Measures 5 and 50)R
    • Payroll tax on employees (recently failed), employers or both.

Additional Background Resources

For more information on the City's budget situation:

• General Fund Budget Frequently Asked Questions
• General Fund Simulation Tool
• Budget Committee Agenda from January 10, 2024 containing fund balances for each fund and the financial five-year forecast. Key take-aways for year ending June 30, 2023:
  • City total resources = $916 million
  • City total expenses = $522 million
  • General fund is the portion of the resources and expenses supported primarily by property taxes:
    • Total general fund resources = $197 million
    • Total general fund expenses = $161 million
  • Five-year forecast (Page 26 of the agenda packet)
    • The forecast for the General Fund demonstrates a structural imbalance between current revenue and the cost of providing services. (The City’s General Fund supports operations in the areas of public safety, planning, code enforcement, public library, municipal court, parks and recreation, urban development, and internal support services that provide a Citywide benefit.)
• City Budget Reduction Scenarios from September 18, 2023 work session:
  • Elimination of all new proposed positions such as additional park ranger and compliance officer positions.
  • Beginning in FY 2024-2025 a total of 21 positions would be cut: seven parks maintenance positions, 12 Library positions (closure of West Salem Branch Library), one Police graffiti removal position, and the youth services coordinator and program.
  • FY 2024-2025, funding for all social service grants and existing sheltering services supported by the General Fund like safe parking and warming shelters would cease.
  • FY 2025-2026, one fire station (nine firefighters) would be eliminated, along with 12 police officers and staff.
  • FY 2027-2028 another fire station (nine firefighters) would be eliminated.
  • Increased fees for parks, recreation, and Center 50+, along with a redirection of Transient Occupancy Tax (TOT) revenue away from third party grantees to fund City parks maintenance.