City of Salem, OR

01/16/2026 | Press release | Distributed by Public on 01/16/2026 17:27

Leaders Seek Ways to Reduce Future Budget Shortfall

The City of Salem is focused on finding strategies and solutions to address projected budget shortfalls in the coming years while continuing to provide essential services.

Why This Matters

Recent updates from Salem's Budget Officehighlight the importance of addressing these challenges. Since October, the City has revised its financial expectations, projecting higher costs and lower revenues. These changes directly impact the services that residents rely on and the City's ability to maintain them.
Understanding and addressing these financial issues are critical to ensuring that Salem remains a vibrant and well-supported community.

Financial Forecast Update

At the Salem Budget Committee's January 14 meeting, the group, which includes an equal number of local residents and City Council members, reviewed the updated Five-Year Financial Forecast. The forecast revealed that despite the support provided by Salem's essential services levy -- which funds libraries, parks, recreation, and Center 50+ -- the City's budgeted costs are expected to exceed revenues in the General Fund as early as Fiscal Year 2028.

City Manager Krishna Namburi emphasized the need for proactive solutions.

"My focus will be working with the Leadership Team to continue making adjustments to reduce projected deficits in coming years," she said. She also stressed the importance of exploring new approaches, innovations, and strategies to control rising costs.

Challenges in Key Funds

Chief Financial Officer Josh Eggleston presented an overview of the City's three largest operating funds:
  • General Fund: The financial picture is better than in previous years. However, the fund continues to face significant challenges due to a property tax system that is limited in growth, along with unexpected cost increases, such as a 16 percent increase in health insurance premiums next year after an increase of 18 percent in the current year.
  • Transportation Services Fund: This fund, which supports streets, sidewalks, stoplights, and other transportation-related services, is primarily funded by the State of Oregon gas tax. However, declining gas tax revenues due to changes in vehicle markets and transportation options are contributing to projected deficits.
  • Utility Fund: Unlike the other funds, the utility fund is more stable, but still facing increased costs. It is primarily supported by utility bill payments and is forecasted to remain balanced with an assumption of steady, moderate rate increases.

Next Steps

City leaders are committed to addressing these financial challenges to ensure the continued delivery of essential services. Residents are encouraged to stay informed and engaged as the City works to develop sustainable solutions.

City of Salem, OR published this content on January 16, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on January 16, 2026 at 23:27 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]