Salem City Council budget deficit strategies: Will these be new or more of the same in 2024?

The Salem City Council has returned to the drawing board with a two-fold strategy to gain revenue and to protect the budget, hoping to solve Salem’s projected $19.4 million deficit after the employee payroll tax failed on the November 2023 ballot. 

But there continues to be much debate over how much of the deficit should be made up by more proposed taxes, levies, or fees that would go into effect in 2025 or if there is any viable room to cut or reprioritize existing general funds. 

“This will be difficult because of where the council is divided – one side wants the City to be leaner, and the other wants to fund a larger city budget,” said City Councilor Jose Gonzalez. So, there will be negotiations coming that will include the public.” 

Will Salem see new ideas or more of the same from the City Council going into 2024?

The Council’s Offensive Strategy – Score Revenue

The Council’s offensive strategy is the formation of a Revenue Task Force (RFT), which was City Council approved by a 9-1 vote in the November 27 meeting. Professional firm Moss Adams will lead the Task Force, costing $221,000.

City Manager Keith Stahley spoke in favor of hiring the RFT in this same meeting, saying, “City staff will be engaged in next year’s budget process from January to June and will also be presenting a revised 2024 budget for your consideration in 2024. They do not have the capacity to support this work themselves.” 

Colleen Rozillis and her team from Moss Adams proposed more details in the December 4 council meeting and will finalize it in the December 11 council meeting. The proposal includes meaningful opportunities for a broad range of community members to be involved in a six-month timeframe and give feedback for the city council to use to make decisions with enough time to place a measure on the 2024 ballot if needed.

The Revenue Task Force will also host Town Hall meetings, coordinate focus groups, and send out community surveys to gauge community interest and assess options. They will evaluate all revenue options, analyze key concerns such as compression related to property tax levies, and present their findings. 

The timeline is tight, as is the application process for filling the needed board and commission roles from the public, especially to get the diverse representation that the Council desires to represent Salem adequately. 

The Council’s Defensive Strategy – Protect the Budget

But City Councilor Deanna Gwyn expressed concerns in the November 27 council meeting about limiting this to a Revenue Task Force and did not want to limit the field to the scope of only revenue. 

In the November 27 meeting, citizen Kelly Thomas from Ward 1 said he has 30 years of experience in the built environment, city planning, and state policy, and also wanted to see revenue addressed by the Task Force. 

He said, “If the Revenue Task Force is necessary, it should be renamed and rescoped because it implies that only revenue will be considered where reductions in spending can and should also be considered a more well-rounded approach.” 

City Councilor Julie Hoy said in a post-meeting interview that “she continues to be baffled by the fact that the City put forth a tax which failed in a huge way.” 

“The City has maintained the narrative that we need more money,” said Councilor Hoy. “And I see things a little bit differently and want to know for sure that the City needs money before it asks for it.” 

The Citizen Budget Committee consists of 18 members. It will recommend the annual budget to the City Council after meeting next April and May 2024, which is the standard process for budget planning. 

Councilor Hoy said she understands that the Citizen Budget Committee and Revenue Task Force serve two different purposes but believes the City Council would benefit from a professional firm like Moss Adams being able to also look at ways the City is spending money in addition to ways it could make money, as a way to consolidate efforts and have more eyes on the budget. 

“The Citizen Budget Committee has been doing things the same way for so long, and the consulting firm that does the audit could be a way to look forward,” said Councilor Hoy. “You have to look back, and you have to let history guide you. Your budgets cannot keep getting bigger.” 

Who Decides on the Priorities? Salem Citizens and the Council.  

In a post-meeting interview, City Councilor Jose Gonzalez said that the Council sets yearly priorities with measurable goals for the city staff, mostly surrounding livability, being good stewards of public funds, public safety, etc. 

“We have to decide as a community what we want to fund. We have kicked the can down the road, too. It will be nearly impossible to fund in the future what we fund today. So, let’s prioritize and then look for revenue,” said Gonzalez. 

Mayor Hoy said in the November 27 council meeting that it is the Council’s job to look at all the Citizen Budget Committee and the Revenue Task Force options on the table, as both groups will advise the City Council next year with solutions for the deficit. Hoy said it is the Council’s job to take that mix and figure out the best mix at the end of the day. 

And Gonzalez reiterated that he believes it is not his voice that needs to be heard. The citizens of Salem need to help and join these committees. 

“My position is that these funds do not belong to the Council of the city staff. They belong to the taxpayer, so those are the voices that need to be raised,” he said. “I feel good that we can get to a deal. Because if we don’t, the cuts the City would have to face would not be acceptable.” 

Mayor Chris Hoy also said he wants options to solve the City’s budget deficit, especially when putting something on the November 2024 ballot. 

“It would be a mistake for us to say we want one option for the ballot in November. We need more of a cafeteria approach with multiple approaches,” said Mayor Hoy. “We may not send anything to the ballot in November. We don’t know what the options to choose from will be.”

Councilor Julie Hoy said there are ways forward with growth mindsets. “We are going to work towards all of this investment into a levy or a tax with this Moss Adams group. And we will do our best with the Budget Committee,” she said. 

Four City Council seats are up for re-election in 2024, including Wards 1, 3, 5, and 7 and the mayor. However, the current City Council will determine how to make up the budget deficit, and these budget changes will likely go into effect in 2025 when the new council members begin. 

“Unless people start to listen, it could be more of the same until seats turn over and new ideas come to the table,” said Councilor Hoy.