Salem’s budget committee on Wednesday reconvened for the first time this year to discuss the rosier but still daunting projections for the city’s budgetary shortfall, but gave no indication of what city services will ultimately be cut to close the gap. The meeting came after an updated city financial forecast released Jan. 10 found the gap between Salem’s revenue and expenses will be about $14 million — less than an initial $18 million projection last fall. The smaller number is based on recommendations and analysis from a group called the forecast review team convened by City Manager Keith Stahley. The Wednesday meeting was largely focused on understanding the forecast review team’s updated projection.  The budget committee will eventually make the difficult decisions on what city services to cut, and in some cases possibly eliminate, at four upcoming meetings scheduled in April and May. They’ll do so after Stahley releases a draft budget to base discussions on. The discussions come as the city is struggling to find ways to shore up more revenue to balance its budget and help pay for city services. One idea that is gaining traction is putting a property tax levy on the May 2025 ballot to generate funds for parks, libraries and Center 50+ despite voters indicating in recent polling that they are largely unwilling or unable to pay more in taxes.  City councilors will discuss that option at a Jan. 21 work session. In poll, Salem residents say they won’t pay more property taxes for public safety, library or parks Prior to the discussions Wednesday, the budget committee voted to appoint Russell Allan as the new chair of the committee and voted to appoint Andrew Cohen as its vice chair.  New forecast shows smaller Salem budget deficit, but deep cuts still likely During the meeting, City Councilor Paul Tigan asked the city’s Chief Financial Officer Josh Eggleston to clarify some data points and voiced his concern about putting out a rosier projection that could complicate the public perception of the deficit.  “The point I’m trying to make for the committee is that if you rely on the rosiest part of your forecast, or the most optimistic view, and things don’t turn out that way and you’ve already spent half of your money, the ability to close the gap is much more difficult halfway through the year than it is were you to make the difficult choices at the beginning of the year,” Tigan said. “I like the forecast, but I fear that it could put us in a difficult spot.”  The group’s model for its forecast reflects that city departments tend to spend less than their budgets over the course of a year because some jobs are always vacant as employees leave and new ones are hired. The group also adjusted their forecast based on the assumption the city will collect $4.6 million more in property taxes over the next five years.  Allan, who served on the city manager’s forecast review team, explained for the budget committee the process the group used to come up with its conclusions.  “There’s tension between being conservative for all the reasons why being conservative is important. That was tempered in the group by not wanting to seem as if the city continues to cry wolf. Where we say that it is an $18 million shortfall and then it turns out only to be a $15 or $13 million shortfall. That creates problems of confidence with the public,” Allan said. “Obviously there is no desire to underestimate and then have a cash issue or an imbalance, but there is a tension there between wanting to have a realistic number so that we don’t have the cry wolf syndrome, versus the conservative so that you have the cushion.” One of the main areas where the forecast review team found savings which shrank the deficit outlook came from the fact that the city budgets for full employment but has never actually operated at full employment, according to Eggleston. That’s because some jobs are always vacant as people resign or retire and need to be replaced. City Councilor Vanessa Nordkye said it should be communicated to the public that the nuance of budgeting for full employment does not necessarily mean the city is working at full capacity.  “When I talk to people in the community, people are often under the assumption that we are just now making cuts. We are just now doing things on a reduced capacity, but the reality is we haven’t had full employment in any of our major departments in quite some time,” Nordyke said. “Is that true?”  “That is true. But even with all the funding you are going to see some level of vacancy,” Eggleston said. “So, it is not a lack of effort for hiring those positions, we don’t hold positions open for savings. We’d like them to be filled.”  To illustrate the point Stahley said during a recent meeting with Salem Police Chief Trevor Womack, he learned that the police department, despite hiring a record number of officers in 2024, ended the year with only one more employee than it started. Stahley said this was due to officers retiring or leaving the force.  The budget committee will meet again, three times in April and once in May, where it will make the final decisions on what city services will be reduced or possibly even eliminated. More information about the budget committee including a meeting schedule can be found online. Contact reporter Joe Siess: [email protected] or 503-335-7790.A MOMENT MORE, PLEASE – If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE. The post Salem budget committee discusses rosier, but still severe budget deficit projection  appeared first on Salem Reporter.