Councilors who voted no on payroll tax address Salem budget questions

The Salem payroll tax is set to go to the ballot in November, following a referendum petition that organizers say gathered nearly 13,000 signatures.

The petition came after a July 10 council meeting, where city councilors voted 5-4 to impose a 0.814% tax on wages earned in the city above minimum wage without prior voter approval. The tax aims to address a city budget deficit, and sustain and expand emergency response and homeless services in the city. 

The ballot title for November is “Tax on Wages and Self-Employment Earnings to Fund Services,” according to a notice from the Marion County Clerk’s office.

Following the decision, Salem Reporter reached out to each councilor with a series of questions focused on the public comments heard during that meeting, the councilor’s top priorities when casting their votes and potential impacts of the tax. 

Those who voted in favor pointed to a broken tax system limiting city revenue, the time and effort that would go into a campaign and the goal to limit cuts to city services. Read their responses here.

With the referendum picking up steam and the potential for the payroll tax to be voted down, Salem Reporter sent additional questions to the councilors who voted in opposition to the tax for their thoughts on how the city should address a budget shortfall and potential cuts that would occur if the tax was voted down.

Of the four councilors that voted in opposition to the tax, councilors Vanessa Nordyke and Jose Gonzalez responded to Salem Reporter’s questions. Both councilors previously indicated their main motivation for voting no was the issue of bringing the tax to voters.

Councilors Deanna Gwyn, Ward 4, and Julie Hoy, Ward 6, did not submit responses by Salem Reporter’s deadline though both said they read the questions and planned to respond. Gwyn said she did not know the answers to some of the questions.

During the city council meeting Monday, Hoy said she was concerned with the $75,184 the city spent to print and mail a double-sided informational mailer about the tax to 74,921 residents throughout the city, figures Salem Reporter confirmed with city staff.

“If we’re in a budget crisis is this really the right time to be spending this kind of money,” she said during the meeting. 

Answers to your questions about Salem’s proposed tax on worker paychecks

Councilor responses are below, listed in order of ward. Responses have been lightly edited for style and clarity.

Jose Gonzalez, Ward 5

If the payroll tax isn’t implemented, what is your understanding of the financial condition the city would be in?

There would have to be some cuts made, no other option.

If you believe some source of new revenue is needed, what would you propose and how much would that raise?

Just like we relied on the staff’s recommendation prior, I would need to see what changes they are proposing before I make any decisions. In our form of government, our Council does not prepare the budget or makes daily decisions on spending. This city is 100% run by staff, so we would need to go back to them to present us a new budget with options to fund it and take it from there.

What specific cuts would you propose to the city budget to bring expenses in line with expected revenue?

I would not start with cuts, I would start with what is 100% needed first, then ask the people of our city to prioritize what is remaining.  Not everyone will be happy with what gets cut but that is what happens every day, in our small businesses and in our homes.  I am not afraid to make those tough decisions on where to cut, because that will put us on the right path.  I just read our state legislators just approved an additional $100M for the state Capitol renovation and didn’t think it was important enough to raise that issue with the people before approving it. Imagine that, $100,000,000, I guess it’s easy when it’s not your own money.

 Do you believe councilors and city leaders have done enough to seek a regular source of state funding to compensate the city for losses from non-taxable state property in city limits? If not, what would you do differently?

No, as chair of the finance committee, I asked staff that question several months ago and the only response I get is it’s been talked about for 30 years and hasn’t happened.  A bill was introduced recently, but when 1,000 bills are introduced at the Legislature, that is not something we can hang our hats on. It will take a real effort, by many, with a real plan and holding those elected officials feet to the fire and not stopping until we make it happen.  I would like to hear what Governor Kotek has to say about this, I have seen how she makes decisions and I feel she will seriously look at this. She cannot solve all state’s problems from her level, she along with the state legislature will have to trust cities like Salem with extra funding.

Is there anything funded by the planned payroll tax that you think should not have been included? Why or why not?

There will have to be cuts with some of the funding going to address our homelessness issue, there is empathy and understanding but the message I’m getting from many in my community is this. How is taking hundreds of dollars a month out of my family’s household, when we are barely making it, going to help the city. They feel it will push more people over the cliff and into homelessness too.  A few have made comments worrying about having too many police, but the majority do not want a “blank check” made to address our homeless issue because they see firsthand the negative effects of a few. Like my mom always told me once, “because of a few, many will pay”.

Is there anything you think the payroll tax plan should have funded that was not included in the plan?

The amount was too high to begin with, I sounded the alarm several months ago in the finance committee and it didn’t matter.  Also, as soon as a budget committee member motioned, a few months ago, to pass a budget including a payroll tax without having to go the voters, I knew that was a big mistake and that we would lose the trust of our residents.  Now I am looking for ways to help rebuild that lost trust.

Vanessa Nordyke, Ward 7

If the payroll tax isn’t implemented, what is your understanding of the financial condition the city would be in?  

Our city would find itself in the same financial condition faced by many other Oregon cities. Tough choices lie ahead.

If you believe some source of new revenue is needed, what would you propose and how much would that raise? 

Given the ever-changing cost  of inflation, housing, and gas, the moment you quote a number it becomes out of date. I can tell you one thing: I would not propose a payroll tax that bypasses the voters! I would’ve held listening sessions with the community and business leaders about how best to raise revenue rather than unilaterally passing a payroll tax. Unfortunately, people are so outraged by the payroll tax vote that anything the city says now is likely to fall on deaf ears. Trust has been broken. 

What specific cuts would you propose to the city budget to bring expenses in line with expected revenue?

I would take a hard look at the 70 or so city job vacancies, especially job vacancies that have gone unfilled for six or more months.

Do you believe councilors and city leaders have done enough to seek a regular source of state funding to compensate the city for losses from non-taxable state property in city limits? If not, what would you do differently?

Not even close. Most people have no idea that city leadership tried to get state funding. They missed opportunities to invite city councilors, local leaders and voters to join forces. The city could have rallied the people to write letters to legislators and sign up to testify at the Oregon Capitol. Residents could have called their legislators to take action. We could’ve come together as a community to make the ask, but that’s just not how the city does things.

Had the city done this, the response from lawmakers might’ve been quite different. Even if lawmakers still said no, the city and its residents would have emerged united in purpose, with a shared understanding of our budgetary reality. At that point, we could have met as a community to decide where we go from here. But the city didn’t use that path. Instead, the city unilaterally passed the payroll tax and refused to even continue the July 10 hearing to allow for more testimony.

When we include the public, we gain trust. When we exclude the public, we lose trust.

Instead of inviting the public into a transparent, meaningful, and inclusive discussion of our budgetary challenges, most residents felt blindsided by the payroll tax.

City government struggles with transparency. Outreach, transparency and community engagement are rock bottom on the city’s priority list. The city’s “we know best” mentality is exactly why people are outraged over the passage of the payroll tax without taking it to the voters.

Is there anything funded by the planned payroll tax that you think should not have been included? Why or why not?

I agree with funding police as a general rule. But, I don’t agree that we should be paying police officers to form a homeless outreach team. The city could pay crisis workers to perform homeless outreach at a lower rate than police officer salaries. There even is a possibility of having Medicaid reimburseability for civilian-based mobile crisis unit funding. Social workers are specially trained to deescalate and connect individuals with services, reducing pressure on our network of crisis centers, shelters and emergency rooms. Having volunteered at three homeless shelters, I can tell you that many homeless individuals will refuse to talk with any police officer. But, they will open up to local crisis workers who see working with the homeless population as their life’s calling. We need the right tool for the right job. 

Nor do I agree with the disproportionate impact this payroll tax will have on low-income workers (those making above the minimum wage exemption). At the hearing on the payroll tax vote, we had a single mother on the brink of tears talk about how hard this payroll tax will impact her ability to provide for her family. She is one of many working people who will struggle to pay this payroll tax.

Is there anything you think the payroll tax plan should have funded that was not included in the plan?

Mobile crisis unit and additional homeless shelter services.

Despite my urging, the city considered but ultimately rejected including $300,000 for a mobile crisis unit (MCU) in the payroll tax. The payroll tax will raise over $27 million a year in additional revenue (if it is passed by the voters). Council discussed including $300,000 out of that $27 million to help fund an MCU. The final payroll tax voted upon by Council excluded the MCU funding. 

An MCU is a 911-responsive unit of trained mental health workers and crisis workers who can respond to calls involving mental illness, substance abuse and homelessness. Mobile crisis units free up first responders and emergency rooms for higher acuity 911 calls. This payroll tax is being touted as a tax designed to address homelessness and public safety. Without an MCU, this tax fails to address a big chunk of our homelessness and public safety needs. MCUs are cost-effective way to help persons in crisis. There is broad-based support across the city for a mobile crisis unit. People do not understand why the city has refused time and time again to set aside a tiny percentage of its $700 million+ annual budget to create a mobile crisis unit. 

The payroll tax does not raise a dime for new homeless shelters despite the fact that every Salem shelter is usually full. Paying a police officer to tell a homeless person to go to a shelter doesn’t do any good if all the shelters are full and all the service providers are maxed out. Funding the short list of existing shelters is just not good enough. This payroll tax prioritizes policing homelessness over ending homelessness. Policing homelessness doesn’t reduce homelessness, but it sure does cost a lot of taxpayer money.

I would use the last several annual surveys of City residents as a guide towards prioritizing what to keep and what to cut. Time and time again, those surveys told us to make addressing homelessness our top priority. The payroll tax doesn’t do that. People feel that the city isn’t listening to them.

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

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