SALEM, N.J. — Members of Salem City Council voted unanimously against the proposed municipal budget amid concerns about the significant property-tax impact facing Salem residents following a substantial loss in the City’s taxable ratable base.
The vote should not be interpreted as opposition to funding essential City services or to Salem meeting its financial obligations. Rather, it reflects concern that residents are being asked to absorb an extraordinary increase while the City is experiencing a major contraction in taxable property value.
Council recognizes the City’s obligations under its agreement with the New Jersey Department of Community Affairs and the importance of maintaining a structurally responsible budget. However, Salem has experienced an over $8 million loss in ratables, including impacts associated with the former glass factory and properties moving into City ownership through foreclosure. Because property taxes are distributed across the City’s taxable property base, when millions of dollars in ratables disappear, a larger share of the tax burden shifts to the homeowners and businesses that remain.
Under the proposed budget, Salem residents will face a 43.9-cent increase in the local municipal tax rate, while the school tax rate is also projected to increase by about 65 cents. Based on current estimates, the combined impact would be approximately $545 annually for a property assessed at $50,000.
Our concern, therefore, is larger than a single year’s budget. Salem is actively pursuing redevelopment, returning vacant and foreclosed properties to productive use, attracting new investment, and rebuilding its tax base. However, redevelopment often creates a period in which existing taxable value is lost before new development and replacement ratables come online.
For a community with a limited tax base like Salem, that transition can significantly impact existing taxpayers.
We believe this warrants additional discussion with the State of New Jersey.
Council members supporting the vote are seeking an immediate conversation with the Governor’s Office, the Department of Community Affairs, the Division of Local Government Services, and other appropriate State officials regarding potential short-term stabilization assistance and a broader solution for municipalities experiencing significant losses in ratables during redevelopment.
The City is not asking to avoid its financial responsibilities. We are asking whether there is a better way to meet those responsibilities without placing the full cost of temporary, redevelopment-related loss of taxable value on residents who have remained invested in Salem.
We believe New Jersey should examine a Redevelopment Ratable Stabilization approach that could temporarily assist financially distressed municipalities when substantial taxable property is lost during redevelopment, with assistance declining as new ratables and redevelopment revenues come online. Such a program would align redevelopment policy with New Jersey’s broader property tax relief and affordability goals by recognizing that communities should not have to choose between pursuing transformative redevelopment and imposing substantial short-term tax increases on the residents who already call those communities’ home.
Salem wants redevelopment. We want new housing, businesses, jobs, investment, and a stronger tax base. But the residents who have remained committed to this community should not bear a disproportionate financial burden during the period between distressed property leaving the tax rolls and new development taking its place.
Our vote was intended to create an opportunity to continue working with our financial professionals and State partners toward a responsible budget while seeking relief from an extraordinary circumstance affecting Salem’s taxpayers.
We remain committed to adopting a responsible municipal budget, maintaining essential City services, meeting our obligations to the State, and protecting the City of Salem’s long-term fiscal health.
The City of Salem, New Jersey, is a historic community and the county seat of Salem County, committed to strengthening neighborhoods, expanding economic opportunity, supporting families and youth, and creating a safe, vibrant community for residents, businesses, and visitors. Through strategic partnerships, responsible governance, and community-centered redevelopment, the City is working to preserve its rich history while building a stronger and more sustainable future.
For more information about the City of Salem, visit the City’s official website.