Mayor Dominick Pangallo sent the Salem City Council a $225,261,444 operating budget for fiscal 2027 on Thursday, May 14, an increase of 4.5 percent over the current year, along with a five-year capital plan. The council referred both to the Committee on Administration and Finance; it adopted the capital plan on June 25.
Where the increase comes from
Fixed costs rise $5.5 million, the budget letter says: health insurance up 8.2 percent, or nearly $1.7 million; retirement costs up 5.6 percent, or $924,360; charter school tuition up 6 percent, or $546,339; the Essex North Shore Agricultural and Technical School assessment up 12.2 percent, or $316,150, “despite there being only one new Salem student in the upcoming 9th grade class there”; and the trash contract up 4 percent, or $194,287. Because those centers grow faster than the 2.5 percent levy limit under Proposition 2 1/2, the letter says, the city took “a very limited approach to discretionary increases.”
The school department appropriation is $81,755,368, up $3,582,307 or 4.6 percent, which the letter calls 43 percent more than the average increase of the past decade. Counting school employee health insurance, debt on school buildings and $3.11 million in school capital projects, the letter puts total support for Salem Public Schools above $96 million. New growth is projected at $1.2 million, less than the health insurance increase alone; the city will keep $8,291,185 in excess levy capacity and recovered more than $1 million in unpaid taxes through tax title in the past year. The letter cites 14 straight years of an AA bond rating and 19 years of Government Finance Officers Association awards, and warns that “a reflexively anti-growth position is equivalent to endorsing substantial tax increases.”
Capital plan highlights
The fiscal 2027 capital plan, funded in part by $7,862,000 in general fund bonds and $7,660,000 in water and sewer bonds that the council later approved, includes $3.88 million for location-specific water and sewer projects, $3.86 million for citywide water and sewer maintenance, $2.04 million for repaving, $1.6 million to cap the transfer station, $1.16 million for road safety, $1 million for High Street Park, $1 million to relocate the Willow Avenue offshore sewer pipe, $810,000 for school technology, $700,000 for school security, $660,000 to stabilize the former Coast Guard structures at Winter Island, $600,000 for sidewalk repairs, $350,000 for the Forest River Park bathrooms, $156,000 for anti-vehicle bollards at the Salem Common entrance and $125,000 for new truck doors at fire headquarters.
Fees
Proposed fiscal 2027 fee ordinances went to committee: the residential trash fee would rise from $25.79 to $26.83 per quarter and the annual rate from $163.85 to $170.41, and the commercial collection fee from $37.41 to $38.90, with new water and sewer rates alongside. All received final passage June 25.
The council adopted a first-ever parking permit fee for tour buses: $50 year round and $100 during October, after Ward 7 Councillor Andrew Varela’s amendment raising the October rate passed and Ward 2 Councillor Andrew Smith’s motion to keep a flat $50 failed. Councillor-at-Large Ty Hapworth asked why residents pay to park if tour buses do not. The fine for a standing tour bus with its engine running was raised from $100 to $150.
Also at the meeting
- $250,000 was appropriated for a feasibility study and schematic design of an accelerated repair project at the Horace Mann Laboratory School on Willson Street, covering the roof, HVAC, a geoexchange system and rooftop solar, as the city seeks a Massachusetts School Building Authority grant.
- Committee reports adopted the elderly tax deferral program under Clause 41A, created a local taxpayer fund under state law and raised the maximum benefit for the senior tax work-off program.
- Ward 6 Councillor Katelyn Holappa reported on the 2025 Haunted Happenings review: about 1.1 million visitors in October, direct revenue up 14.7 percent to about $822,000, direct costs up 10.3 percent to $735,000, and about $1.8 million in indirect revenue from meals and lodging taxes for the quarter.
- Eighth graders from the Collins Middle School, the Collins Job Opportunity Coalition, petitioned for more jobs for 14-year-olds in Salem and addressed the council.
- Jay Carroll was appointed city engineer, and block parties were approved for Chestnut, Bentley, Cushing, Perkins and Andrew to Boardman streets, along with the Derby Street Mile and North Shore Runfest road races.
- Council President Alice Merkl opened the meeting with a moment of silence for State Police Trooper Kevin Trainor, killed in the line of duty.
The budget letter and the minutes are here.
