Salem — The City Council on Dec. 4 adopted a residential factor of 0.861738 for fiscal year 2026 and approved several mayoral appropriation orders the administration said will reduce the amount the city must raise through property taxes.

Mayor (unnamed in the record) told the council that strong new growth and enterprise receipts — including about $2 million from city enterprises — lowered the tax burden on residents and helped avoid larger rate increases. ‘‘New growth will bring in just over $1.8 million in new tax revenues this year,’’ the mayor said while summarizing the budget context.

Steven Cortez, director of assessing, presented the Department of Revenue-certified full revaluation that underpins the tax-classification hearing. Cortez described a full revaluation year and explained that Salem’s assessed values rose roughly 9 percent, producing $119,136,621 in new growth value the city can use when calculating the levy. He also laid out the three tax-policy options the council could adopt: open-space discount, residential exemption, and a small-commercial exemption, and recommended the minimum residential factor of 0.861738.

Council debate focused on how growth and policy choices affect individual tax bills. Cortez said the recommended MRF would reduce the median single-family tax bill by changing the split between residential and commercial/industrial classes, but noted that individual bills vary with assessed values and exemptions.

On a series of mayoral financial orders the council approved transfers and appropriations intended to lower the tax amount to be raised and to fund capital projects and enterprise subsidies. Examples voted on included appropriations from free cash and other reserves to the stabilization fund, capital outlay, and an appropriation of $3,869,101 to support the FY26 trash enterprise subsidy; councilors characterized many of the items as housekeeping transfers required by state rules or to cover previously budgeted needs.

Councilor Merkel, who moved the MRF adoption and several transfers, said the city’s ‘‘responsible growth’’ and attention to revenues helped preserve excess levy capacity and keep tax impacts modest. The council recorded the vote adopting the residential factor by roll call (recorded in the minutes as carried with nine in the affirmative and two absent).

The council also voted not to adopt the open-space discount, the residential exemption and the small-commercial exemption for FY26, saying staff analysis showed little local benefit for those options this year.

What’s next: The adopting order sets the classification used to calculate FY26 tax bills; residents will see bills based on the certified assessments and this adopted factor when the final tax rate is set.

Sources: Presentation by the director of assessing and roll-call votes recorded Dec. 4 in the Salem City Council meeting.