A public hearing held Monday night generated no opposition to a multi-part, tax-and-fee proposal designed to help Salem pay for its high school overhaul and other major projects.
The city council, after listening to four speakers weigh in on the budget and tax rates, voted to move ahead with the financing plan.
That decision, which takes effect July 1, means the city’s real estate tax rate will rise to $1.20 — up from the current rate of $1.18 — per every $100 of assessed value.
The personal property tax rate will move to $3.40, up from $3.25, per every $100 of assessed value. And the monthly trash collection fee will increase from $7 to $10.
Together, these changes are expected to generate about $1.2 million per year. That would cover the debt service on the upcoming renovation of the city’s sole high school and, over time, could be used to support other looming projects such as upgrades to the Moyer Sports Complex or the Salem Civic Center.
Council members said they didn’t arrive at this proposal lightly and had worked to devise a balanced approach that would allow the city to start digging into the backlog of capital needs built up during the Great Recession.
“We’ve got to think about tomorrow,” said Councilman Bill Jones. “... It’s very tough for all of us up here to increase stuff but this is what we think is best at this time to take care of the future of Salem.”
Councilman James Martin noted the city had been working toward the high school renovation for years.
“This is an important investment the city needs to make,” he said.
The city council voted unanimously to approve the tax and fee changes. It also cast a first vote of approval on the larger city budget set to take effect July 1.
The new budget offers a 3% pay raise for city workers. Electric rates and sewer rates remain unchanged. Starting in January, water rates will rise by 3% in keeping with the city’s five-year rate plan.
A second vote is set for June 24 to give final approval to the appropriations.
During a pair of public hearings on the budget and the tax rates, no one spoke in opposition to the proposed increases.
One resident sought more information about the city’s long-term debt policies and urged officials to ensure that a proactive approach to debt management is in place. Another suggested the city should study the merits of one day transitioning to a trash toter fee based on usage as some households generate relatively little garbage.
The head of the local PTA Council thanked the city for supporting its schools. And a retired city employee pointed out that, while current employees will get a raise this year, health coverage costs are also expected to rise so lower-paid employees may gain little ground.
He urged the city to try to do more for those workers in the future.
The new capital funding generated by Monday’s decision will first go toward a major renovation of Salem High School that is slated to start next year.
That work is designed to modernize and expand sections of the 42-year-old school building. The city expects to issue bonds to pay for $32 million of the project’s $36 million price tag.
Over time, as that debt is paid down, city leaders plan to redirect the money to other major facility needs hovering on the horizon.
The exact lineup is still under discussion but officials said there is a growing list of deferred needs to tackle.
This marks the first time in decades that Salem has raised its real estate tax rate. That rate is the city’s biggest source of revenue and has remained unaltered since 1988.
The new tax rate that will soon take effect translates to an additional $40 per year for a home valued at $200,000.
The rise in the personal property tax rate will mean an additional $45 per year for a car valued at $30,000.
The personal property tax rate and the monthly toter fee were both last beefed up in 2014 as part of a push to supply an employee pay raise after years of recession-driven freezes.