Salem’s new annual budget will be up for public comment during a set of hearings slated for Monday night.
The budget as currently crafted includes a multipart proposal to help pay for the city’s long-awaited high school renovation and other major projects looming on the horizon.
The city council will consider bumping up its real estate tax rate for the first time in decades to support a $36 million update to the city’s sole high school.
The financing proposal also calls for increases in the personal property tax rate and the monthly trash collection fee.
The moves, if approved, are expected to generate about $1.2 million per year. That would cover the debt service on the high school overhaul and, over time, could be applied to other looming projects such as upgrades to the Moyer Sports Complex or the Salem Civic Center.
The exact lineup of future projects is still under discussion but officials said the city is grappling with a mounting list of deferred facility needs.
The high school renovation is set to start next year. The work is designed to modernize and expand sections of the 42-year-old school building.
The funding proposal that city council is considering breaks down into three parts:
- Boost the real estate tax rate to $1.20, up from the current rate of $1.18, per every $100 of assessed value.
This would mark the first rise in Salem’s main tax rate in more than four decades. The rate has been at its current level since 1988. The last two times it was changed, in 1981 and 1978, it was lowered.
If approved, the new rate would translate to an additional $40 per year for a home valued at $200,000. Real estate values are reassessed annually and also affect a property owner’s final tax bill.
- Increase the personal property tax rate to $3.40, up from $3.25, per every $100 of assessed value.
This tax rate was last raised in 2014 as part of a push to provide a pay raise for city and school staffers after years of recession-driven salary freezes.
The rate now proposed would mean an additional $45 per year for a car valued at $30,000.
- Raise the toter fee from $7 per month to $10 per month. This fee was also last changed in 2014 after years of holding at $1.
The proposed new charge better reflects the actual cost of trash collection, officials said, and would free up general funds to support infrastructure work.
Setting the fee at $10 was considered five years ago but a compromise was struck at $7.
These proposals will be up for public comment Monday night as a part of a set of hearings on Salem’s tax rate and its new budget for the coming year.
The budget, which will take effect July 1, includes a 3% employee pay raise. Electric rates and sewer rates would remain unchanged. Starting in January, water rates would rise by 3% in keeping with the city’s five-year rate plan.
The public hearings will be part of a Salem City Council meeting kicking off at 7:30 p.m. Monday at City Hall, 114 N. Broad St. The council is scheduled to cast its first vote on the budget that same night with a second and final vote to follow June 24.