How do we save Salem? The latest on the controversial employee-paid payroll tax 

Salem voters will soon have a voice in the November 7, 2023, Special Election to decide whether the employee-paid payroll tax is the best solution to save Salem. But Salem City Councilors disagree about what exactly Salem needs to be saved from – the General Fund deficit that will cause emergency services to suffer or from the payroll tax itself. 

Do we need an employee-paid payroll tax to save Salem? 

Councilor Julie Hoy plans on continuing to pursue answers to the questions she raised in the August 28 Salem City Council meeting about the City’s financial position and doesn’t believe citizens should have to choose between saving Salem at the expense of a nearly 1% wage tax on those who work in Salem or losing their sense of public safety. 

“I have questions about the City’s financial position. It appears our financial position does not match our messaging. I don’t think we need the payroll tax. Based on our publicly available audited financial reports, it doesn’t appear that we have a financial crisis,” said Hoy. “We may have a problem creating accurate forecasts and budgets. But we don’t seem to have a history of deficits. It also appears that we continue to stockpile our financial reserves.” 

Councilor Trevor Phillips voiced his frustration in response to Hoy’s budget concerns in last month’s Council meeting. “We had an entire budgeting process. We have had staff and Moss Adams do their due diligence in explaining to us as clearly as they can with data and audits what our numbers are,” said Phillips. “And to throw in doubt at the last minute, based on an individual’s interpretation of these numbers. I find it deeply frustrating.”

Phillips said his earlier conversation with City Manager Keith Stahley showed what things are coming if Salem doesn’t find a way to raise revenue. “The cuts that are coming – not being able to staff a fire station in our near future – within less than 12 months, having to cut back on patrols, having to close the West Salem library, and scaling back hours on the main library,” he said. 

Phillips isn’t okay with these cuts. “We can disagree. We can try to be respectful. There is a whole process,” he said. “We’ve looked at these numbers. I would like us all to agree on our facts.” 

Councilor Hoy continued to call for more understanding of the City’s budget, given its magnitude and size. “We need more information, and we need more clarity. I think that would come from the auditing effort every year. Those folks could allow Council to ask questions and understand what’s happening,” said Hoy. “And the numbers don’t lie. I think they need another look. Certainly, before we implement a tax.” 

In an interview after the Council meeting, Hoy said that the answers to saving Salem are to think bigger about the return on investments related to where the City is putting its resources, everyone slowing down to allow for more questions and clarity regarding the budgeting, and going back to the drawing board together to find citizen-supported solutions if the employee-paid payroll tax doesn’t pass in November. 

Hoy thinks the City can do better. 

“We may need to reallocate our budget to provide necessary funding for critical services like public safety. But we don’t need to burden the citizens with a new tax. City Council passed the payroll tax because we were told it was necessary,” she said. “We don’t need to do it with threats about public safety since that’s our number one responsibility. If people feel unsafe, we’re not doing our job.”

How could the employee-paid payroll tax help?  

“Save Salem” is a new volunteer effort to educate citizens on why they should vote yes on the employee payroll tax that has qualified for the November 2023 ballot after the Oregon Business and Industry’s “Let Salem Vote” petition garnered nearly 13,000 signatures last month. 

Councilor Virginia Stapleton, Salem Citizen Budget Committee members Paul Tigan and Dr. Irvin M. Brown, and Salem Planning Commissioner Michael Slater are listed as the team for Save Salem, helping answer frequently answered questions like why we need the money, why this is happening, what the payroll tax will be for, what cuts have been made, and how much of this will be used for unhoused residents. 

According to the Save Salem website, the risks of not upholding the payroll tax include no longer being able to maintain our parks, the Salem Police Department not having sufficient staff, closure of the West Salem library, reduced hours at the main library, current vacancies in the fire department will go unfilled with possible layoffs if a fire station is closed, a new fire station will not open, a delay in fire response time, services at our micro-shelter locations at Navigation Center will end, the likely end of the Safe Park program, and the Center 50+ will experience a reduction in hours and services like Meals on Wheels. 

A yes vote on the November ballot will favor upholding the City Council’s recently adopted tax, scheduled to start in the summer of 2024. Someone who earns $62,192 annually from work in Salem would pay over $500 yearly. The revenue will generate $27.9 million annually and address the existing $19.4 million General Fund deficit, according to Save Salem.

Is Salem going to vote yes or no? 

City Councilors shared divided opinions in last month’s Council meeting on whether or not they anticipate that Salem will choose to vote yes or no based on constituent feedback. 

Councilors Deanna Gwyn and Jose Gonzalez joined Hoy in support of a motion to repeal the tax due to the likelihood of ballot failure, which they said would be a chance to avoid unnecessary costs and rebuild trust.

Gwyn said her constituents “screamed very loudly that they did not want this tax” and would not be supporting it. 

Gonzalez also noted that voters wanted to stop the tax and saw the Let Salem Vote petition as their only outlet. Gonzalez said a citizen even contacted him, contemplating suicide over the tax. 

Hoy motioned for the Council to repeal the tax to bring the community together on solutions to the budget crisis that they would support.  

But the motion to repeal the tax failed in a 6-3 vote to allow the tax to go to voters in November.

Councilor Micki Varney said, “If the vote doesn’t pass, we’re all going to face a new reality. It’s going to be painful. I am hoping that the voters take the time to do the research and really understand what they’re voting on. I, too, like Councilor Phillips, have received emails from folks who plan to vote in favor of this and have done more research, and they understand the dilemma.” 

Since she came on board last fall, Hoy said executive leadership has said they will not bring this to voters because it will not pass if they do. “I’m still disappointed that my colleagues chose to spend the money on something they’ve told me all along that the voters will not pass.” 

Despite failing to repeal the employee payroll tax, Hoy believes in keeping sight of priorities. “We have the opportunity to be creative and make things better and different. But we all have to be willing to go there,” she said. “I’m not a person who gives up easily. I’m a person of hope.” 

To register to vote or find more information on the November 7, 2023, Special Election, visit Oregon.gov.