George McCabe Answers Our Questions
Taxes, Development, and Housing
QUESTION 1 – Salem’s tax rate, both residential and commercial, has consistently gone up around 2% every year. Do you feel that this “stability” best serves the city, or should we take another approach? Please be specific as to the impact on city services that your approach would bring.
Stable tax rates are always the preferred approach. The average increase might be 2%, which is reasonable, but that’s an average. There have been spikes in bills due to rate increases and from increased valuations lately.
I served as Chairman of Council Finance Committee and was a committee member for several years, so I look at Salem’s current financial position first when I’m asked about taxes and municipal services. Currently the City is in pretty good shape financially judging by the following estimated numbers:
- Free cash – between $2.5M $3M Used for unexpected expenses. Water breaks, excess snow removal etc.
- Stabilization fund – ended the last fiscal year with over $7M. This fund is the Cities savings account which is carried over each year. As with all municipal funds it’s subject to appropriation by the City Council.
- Excess levy capacity – Around $5M. This comes from the Proposition 2 ½, law that passed in the early 80’s and restricts the amount of money a city can raise from property taxes to 2.5% of the total real estate value of the entire city. Having excess levy capacity is a good thing because, in this case, it’s $5M that is not billed to the taxpayer.
- Bond Rating: AA – I believe this is the highest bond rating the city has ever had which is a direct result of good fiscal management and new growth.
The first 3 are some of the things that Bond Rating Agencies look when accessing the cities financial condition. The AA rating is good and reduces the cost of borrowing. It’s also a good selling point to business’ and people looking to relocate here.
A city in good financial condition will always have a positive impact on city services. I know street and sidewalk repairs are done incrementally and I have heard some good things from residents about reporting issues on the ‘click fix’ app and having issues resolved quickly. The one thing I have noticed personally while walking door to door is the condition of the sidewalks. There are a lot of tree roots pushing up and causing hazardous conditions on sidewalks. That is one budget area that we could beef up for safety issues alone. I’ve talked with residents who have been waiting a long time for sidewalk repairs or reconstruction. Generally, when a community’s finances are strong, municipal services are as well.
QUESTION 2 – Salem has, and is, undergoing a long-term development boom that has impacted every neighborhood in the city. Should Salem take steps to slow development?
We never want to slow development, but we must be smart about the types of development we allow to be built. The market usually determines these things and the rising real estate market in Salem has been a prolonged one. It won’t last forever but because we are now a busy tourist city with a vibrant downtown, I feel we are well positioned to be an attractive place for developers for years to come.
Salem is a small City and is different from what many of us knew even just 15 or 20 years ago. Hundreds of thousands of people visit our city each year and more and more young families have moved here. The high-density development has mostly been along the North River Corridor and the downtown area. That is where they should be given peoples access to the T and the ability to walk or bike downtown.
That being said, except for a zoning change or tax increment financing request, approvals for developments are made at the board level. Board members need City Council confirmation so I would certainly question potential appointees about their thoughts on the subject and weigh in at board meetings when necessary.
I would want potential board members to use the same criteria that I have always used and will continue to use when considering proposals:
- Are the facts presented correct?
- What are the impacts on a nearby neighborhood and how can they be mitigated?
- Is this the right thing for the City of Salem in the long run?
If the answer to those three questions are yes, impacted but with satisfactory mitigation and yes, then I can support something. If not, there is either work to do or I most likely won’t support it. It doesn’t matter to me who presents it. It’s about what is good for the City of Salem.
QUESTION 3 – Entry level workers, lower income families, hospitality employees, and seniors find Salem to be an unaffordable place to live. How can we best plan to meet the housing needs across all demographics in Salem?
I’m pretty much in agreement with the overlay plan for the re-use of religious and municipal buildings for housing with a percentage to be affordable units. I also think changing the language of the current in-law apartment rules – from in-law and caregiver use only to allowing rental to others will allow for more affordable units to be created. I do think that the change should not be given by right but by special permit. It’s important that it does not become abused and turn single family neighborhoods into 2 family neighborhoods. I know that’s not the intent, but I think it’s prudent to shine some light on each unit through the special permit process. Both proposals are modest and will not create many units. They are however small steps that the city can take to help with affordable housing in what otherwise is market driven.
The other housing issue we need to start focusing on is affordable housing for our seniors and veterans. The current senior and veteran housing complexes are old and in constant need of repairs.
As a community we need to start advocating for new and more senior housing and working with the state and federal government to secure funding.