Salem’s most powerful resident said Thursday she expects to vote against the city’s proposed payroll tax.
Gov. Tina Kotek, who moved to the governor’s mansion at Mahonia Hall in January, is among the more than 91,000 Salem voters who will get the chance to decide in November whether the city can move ahead with a 0.814% tax on workers’ paychecks for all work done in Salem.
Kotek, who makes $98,600, could end up paying close to $800 annually. A worker earning the average wage in Salem would pay close to $500.
The state of Oregon is Salem’s largest employer with 21,000 workers – close to a quarter of the city’s workforce, according to the city’s most recent annual financial report. Kotek said she understood Salem’s needs – the city expects a budget shortfall of more than $15 million by 2026 – but she needed to think about the proposed tax from the state’s perspective.
“I am sympathetic to the needs of the city of Salem,” Kotek said. “I think it needed more conversation about how it would be implemented. We obviously have a lot of employees from a human resources perspective and we would be involved in having to manage that kind of tax.”
The Salem City Council voted 5-4 in July to impose the tax beginning in July 2024. The Salem-based Oregon Business & Industry led a successful initiative to refer that vote to the ballot, meaning the tax will take effect only if a majority of voters support it.
The tax would apply only to work done in the city, so Salem residents who work elsewhere would be off the hook and commuters would have to pay. More than 11,000 of the state’s Salem-based employees work remotely part-time or full-time, according to the state Department of Administrative Services.
Salem also hosts 90 state legislators and their staff, who work full-time from the Capitol during legislative sessions and rarely at other times.
Kotek said she wants to talk with officials in Salem and other cities about how they’ll meet local needs and what the state can do to help, anticipating the upcoming expiration of short-term funding cities received through federal COVID relief spending. For instance, she expects to ask the Legislature to provide money next year so cities including Salem can continue operating homeless shelters that they opened with federal funding.
“Salem is not alone,” she said. “We have a lot of local governments who are struggling to provide basic services.”
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Julia Shumway is deputy editor of Oregon Capital Chronicle and has reported on government and politics in Iowa and Nebraska, spent time at the Bend Bulletin and most recently was a legislative reporter for the Arizona Capitol Times in Phoenix. An award-winning journalist, Julia most recently reported on the tangled efforts to audit the presidential results in Arizona.