Mayor Dominick Pangallo Presents FY2025 City Budget

Mayor Dominick Pangallo has filed the proposed FY2025 City budget with the City Council, which will begin its review of the spending plan in the coming week. The full budget, as well as a “Budget in Brief” summary, is available online at www.salemma.gov/fy25.

“The proposed budget reflects the values and priorities of our community by focusing on livability, improving services, and transparency,” said Mayor Dominick Pangallo in his message to the City Council. “We want a vibrant community for all and to ensure that municipal services, policies, and projects are forward-looking, open to innovation, and delivered efficiently and effectively. The proposed budget builds on the strong foundation we have here in Salem and keeps our city and schools moving forward as we strive to be a community that works for everyone.”

The proposed FY2025 Salem general fund budget is $204.1 million, a change of 4.1% over the previous year’s budget. Fixed costs on the City side of the budget are increasing in FY2025 by almost $3.4 million exceeding the historical average of the past decade by nearly 30%. On the School side of the budget, fixed costs are increasing by nearly $3.2 million. For every dollar the total budget is increasing, 81 cents of that are from fixed costs going up. The proposed FY2025 budget accounts for and strategically manages for these increases in fixed costs, the impacts of inflation, rising personnel costs, and the ending of one-time federal funding related to the pandemic, without compromising the City’s focus on providing critical services and programs for the community and for its schools.

“While the pressures are significant in this coming fiscal year, there are reasons for optimism,” Mayor Pangallo observed in his budget message. “We have an incredibly strong local economy in Salem, healthy levels of new growth, and solid fiscal policies and practices that have resulted in the recent affirmation of our historic bond rating and receipt of recognitions from the Government Finance Officers Association, as well as strong stabilization fund balances.” In its affirmation of the AA bond rating, S&P Global Ratings specifically cited Salem’s “strong financial management environment with a focus on long-term financial and capital planning…to support stable finances.

The proposed Salem Public School budget for FY2025 is an increase of 4.8% over last year, a rate of increase that is 72% more than the average rate of increase for Salem schools over the last decade. As with the overall budget, fixed costs are the largest driver in the school budget increase. In all, these cost centers for schools will increase by around $3.1 million in FY2025.

“Our proposed school budget aligns with the district’s new strategic plan with investments in the changing nature of our student population and our continued commitment to innovative and successful programs, including our Pre-K Partnership, Reimagining Middle School, and others,” said Mayor Pangallo, who chairs the Salem School Committee. “Overall, Salem Public Schools are progressing in many areas identified in the strategic plan – educator diversity and retention, chronic absenteeism, graduation and drop-out rates – but we still have a lot of work to do.”

The budget also includes the Capital Improvement Plan, which invests in the projects, facilities, and equipment necessary for the City to serve the public. The plan includes a quarter million dollars for accessibility improvements and $1.3 million for public safety needs, another $1.3 million for service delivery and operational improvements, and close to $2.3 million for parks and open spaces. It provides $2.4 million for historic preservation projects, $3.7 million for sustainability, remediation, and resiliency efforts, $6.6 million toward improvements to water, sewer, stormwater, and municipal building infrastructure, and an additional $6.6 million in repairs and safety enhancements for our streets, sidewalks, and multi-use paths.

“The projects that are detailed in the FY25 Capital Plan help advance many of our shared goals to create a City that’s vibrant, safe, and with an improved quality of life for community members,” Mayor Pangallo explained in his message to City Councillors.

“The mission of City government in Salem is to provide open, honest, and pro-active services effectively and efficiently, focusing on the needs of today, with a vision for the future,” Mayor Pangallo concluded. “To accomplish this, the proposed budget aligns operations with strategic goals and objectives, while maintaining a responsible approach to fiscal management. I appreciate the hard work that City departments have put into the development of this year’s budget, and especially Finance Director Anna Freedman and her team in the Finance Department, who have shown incredible professionalism and dedication to our community. The proposed FY2025 budget continues Salem’s balanced and thoughtful approach to City finances. It invests in the critical services and projects that make Salem a vibrant and more livable city, with schools in which we can all take pride, excellent municipal services, and a continued commitment to transparency. The FY2025 budget will help ensure that Salem remains a financially strong and professionally led city that strives to work for all.”