Salem City Hall (Salem Reporter files)
Updated: This story was updated at 4 p.m. with additional details about the fees and charges.
City of Salem officials will consider new taxes and fees as a solution to a potential $6 million budget shortfall.
The new revenue streams are being proposed by the Sustainable Services Revenue Task Force, on which sit the mayor, two city councilors, the city’s budget committee chair and 10 community members. It recommends an operating fee, an employee-paid payroll tax and a local gas tax.
Recommendations will be presented to the city’s budget committee Dec. 10. A full report is slated to go to Salem City Council in January.
Of the three, an operating fee and payroll tax could feasibly be enacted by Salem City Council, while a gas tax would have to be approved by voters. Mayor Chuck Bennett told Salem Reporter he hoped voters would be able to decide all three.
“That would be what I would support,” he said. “I think voters should always have a voice if government’s going to come stick their hand in their pocket in a new and different way.”
The three proposals aim to fund city services as costs rise. Budget officials say Salem’s expenses, such as paying workers’ wages and retirement benefits, are outpacing revenues from sources like property taxes.
Kelley Jacobs, Salem’s budget officer, said a budget forecast for years 2019 through 2023 show the city needs to increase revenues about $6 to $8 million every year.
The task force’s recommendations only recommend the methods, Jacobs added, and do not specify a certain rate.
The proposed operating fee would be added to utility bills, according to documents from previous task force meetings. Rates could vary based on the type of customer, such as a single-family home, an apartment or an industrial site. About 50 cities in Oregon have such a fee to fund various programs. In Keizer, for example, residential customers are charged $8 a month to fund public safety and parks.
An employee-paid payroll tax would impact private and public workers within Salem, withholding a percentage of wages that would pay into the city’s general fund.
And the proposed local gas tax would add cost at gas pumps to help pay for the city’s transportation services fund — maintaining pavement, bridges, traffic signals and more. Statewide, 27 cities and two counties have local gas taxes, according to task force documents.
The recommendations come after four meetings of the task force, dating back to September.
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