City News

Salem payroll tax heading to November ballot

The city of Salem’s payroll tax is set to go before voters in November, Marion County Clerk Bill Burgess confirmed on Friday.

The office verified over 4,000 signatures as of Friday afternoon, exceeding the required threshold of 3,986 to put the issue before voters. Verification required that those who signed a petition to refer the measure to the ballot are registered to vote in the city of Salem. Burgess said election workers plan to verify at least 4,025 to be sure.

“It qualifies,” Burgess said.

The Salem payroll tax is set to go before voters on the Nov. 7 ballot.

The petition challenged a 5-4 vote decision from the Salem City Council on July 10 to impose a 0.814% tax on wages earned in the city above minimum wage.

The tax is intended to help close a city budget shortfall and would pay for additional police and firefighters, as well as funding operations for several homeless shelters after federal money for the programs runs out. Councilors in favor said the tax would prevent impactful cuts to community services.

With the new ordinance, workers would pay 0.814% of wages, about $42 per month for a Salem worker earning the city’s average wage of $29.90 an hour. Minimum wage earners are exempt. A June 12 report from the city estimated the tax would bring in $27.9 million per year.

Oregon Business & Industry, a Salem-based business group, filed a petition to refer the tax to the ballot on July 14, and said it turned in 12,909 signatures by the submission deadline on Aug. 9.

As of Friday, the payroll referendum campaign has received over $48,000 in cash and in-kind contributions, chiefly from the political action committee for Oregon Business & Industry. Other top donors are the conservative group Marion+Polk First with $5,756 in-kind and Salem law firm Sherman Sherman Johnnie & Hoyt, with $5,573 in-kind, according to campaign finance records.

“Salem residents have left no doubt that they want to vote on this tax,” said Angela Wilhelms, president and CEO of Oregon Business & Industry, in a Friday press release. “People were eager to sign the petition, and we submitted more than three times the number needed to place the tax on the ballot.”

Mayor Chris Hoy told Salem Reporter Wednesday that he and the other city councilors have been waiting to see how the petition would pan out before making plans to prepare for the November election.

The council could opt to change course and pull the tax before it goes to voters. Hoy said Wednesday the council hadn’t yet discussed doing so.

By state law, city employees cannot campaign on ballot measures, so any campaign in favor of the tax would have to be led by councilors who supported the measure or citizens advocating for it.

The city will pay the estimated cost to run the election. That would be around $220,000 according to a July staff report from the city. The Salem city council will hear an informational report about the petition effort during its Monday, Aug. 14 meeting.

Update: This story has been updated with comment from Angela Wilhelms, president of Oregon Business & Industry.

Contact reporter Abbey McDonald: [email protected] or 503-704-0355.

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Abbey McDonald joined the Salem Reporter in 2022. She previously worked as the business reporter at The Astorian, where she covered labor issues, health care and social services. A University of Oregon grad, she has also reported for the Malheur Enterprise, The News-Review and Willamette Week.