Salem officials report impact-fee balance will shrink after planned draw to offset next year’s budget

Assistant to the superintendent for business operations Debbie Payne presented the district’s impact-fee summary and noted the account’s balance and statutory spending timeline. For fiscal year 2024–25 (July 1–June 30), the district recorded $171,852 in deposits to the impact fee account and withdrew $1,132,000 to offset the operating budget, leaving a year-end balance of just over $1.3 million. The administration’s draft budget for fiscal 2026 proposes using $750,000 from impact fees to offset next year’s budget; if approved, Payne said the impact-fee balance would fall to just under $550,000.

Payne reminded the board that state rules require impact fees be used for capacity-related debt and that impact-fee proceeds generally offset debt service for construction that increased capacity, such as the elementary additions and kindergarten expansions. She said recent years’ receipts have been smaller than earlier building years and cautioned the board that the account will not sustain the same annual offsets it provided in earlier high-development years.

Why it matters: Impact fees are a one-time revenue source tied to new development; the planned withdrawal reduces the reserve available for future capacity projects and may increase pressure on other funding sources if development receipts remain low.