Salem City Councilor Julie Hoy's stunning official testimony opposing the new city income tax.
“According to page 49 of our 2022 Annual Comprehensive Financial Report, the General Fund reported a surplus of$9,768,525 after budgeting a deficit of $1,432,330. I’ve seen it reported that we had a deficit of $11.2 million for 2022, but that was actually how much we exceeded our budget.
(See City of Salem’s Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2022) https://www.cityofsalem.net/home/showpublisheddocument/18500/638107980194370000
The surplus in the General Fund is not unique to 2022. Over the past 10 years, the City of Salem has budgeted General Fund deficits every year. In some years the deficit has been as much as nearly $12 million. Last year was only $1.4 million, but that assumed we would transfer $6.5 million from other funds to close the gap. But only three of the last 10 years have reported actual deficits and actual results in all 10 years have been at least $7.5 million better than budget. During the past 10 years, the General Fund balance has grown from $20.8 million to $40.7 million. It doesn’t look like we are depleting our reserves.
(See “General Fund Change in Fund Balance” and “General Fund Ending Fund Balance”) https://www.cityofsalem.net/government/budget-finance/financial-reports
We appear to be following the same trends for the first 3 quarters of fiscal year 2023. According to the City of Salem Financial Summary Through Q3 Fiscal Year 2023 posted on the City’s website, total resources were $169,342,224 while total expenditures were $120,070,563. After deducting the beginning fund balance, this means the General Fund again has a surplus of nearly $8.6 million through 9 months. We appear to be on our way to another surplus over $9 million and a growth in resources (revenues) of almost 10% year-over-year. This appears to directly contradict public claims that revenue growth is not keeping pace with population growth. In addition, our ending fund balance has grown to $49,271,661. Our reserves are continuing to grow.
I’ve spent most of my time on the General Fund. Let’s considerall the City’s funds for a look at the City’s overall financial picture. We seem to consistently end each fiscal year with much higher reserves than budgeted each year. Our 2022 budget expected to only have combined fund balances of $117,437,800at June 30, 2022. Instead, we ended fiscal year 2022 with combined fund balances of $379,074,800. This is an excess of $261 million.
(See “City Ending Fund Balance”) https://www.cityofsalem.net/home/showpublisheddocument/20021/638225254120600000
City of Salem budget tool to revise the budget: https://salembudget.abalancingact.com/fiscal-year-2024-proposed-general-fund-budget