Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Auditor: Salem property‑tax receipts down about 20%; business profit tax plunges 64%
Summary
City Auditor Sabino told council on April 7 that property‑tax receipts were down about 20.2% year‑to‑date and that business profit tax revenue has fallen roughly 64% compared with last year, prompting calls for a midyear finance‑committee review and contingency planning.
Auditor Sabino told the Salem City Council on April 7 that the city’s preliminary quarterly financial report shows a notable decline in tax receipts and uneven income‑tax performance.
“Property taxes are down 20% — 20.2% — as of that date,” Sabino said while walking council through the packet comparing the first quarter of 2026 with the same period in 2025. He said that timing of advance payments and settlements affects year‑to‑date comparisons but highlighted the drop as a concern for budgeting.
Sabino also reported that business profit tax collections are down sharply. “Business profit tax is down from last year and it’s down 64%,” he said, adding that withholding and individual income‑tax receipts showed different patterns. Sabino told council that municipal income‑tax collections were down approximately $195,000 compared with this time last year and pointed to refunds and timing as primary drivers.
Council members pressed Sabino for more detail about the causes and potential outlooks. He said the advance plus the first settlement produced a year‑over‑year increase of about 7.1% when combined but cautioned that some line items — notably business profit taxes — showed unusual volatility partly driven by refunds and credits. On the effect of pending state legislation, Sabino said the quarterly numbers he presented do not yet reflect the recent state bills and that next fiscal year could look different depending on how state measures and ballot language ultimately affect assessments and collections.
Several council members said the city should prepare for the possibility of deeper changes and requested a finance‑committee review. “It would be my recommendation … for the finance committee to take a look at expenditures we might be able to cut back on in preparation” for possible property‑tax reform, one council member said. Sabino offered to present additional analysis at a future meeting.
Why it matters: Council faces a material change in key local revenues — property taxes and business profit taxes — that fund general operations. The auditor’s report and council’s agreement to examine budget options signal an early effort to prepare for potential revenue declines and to consider alternatives such as adjusting spending or exploring other revenue sources.
What’s next: Council members asked the finance committee to schedule a midyear review and requested a follow‑up presentation from the auditor to break down the drivers of the business profit‑tax decline and to recommend potential offsets.
