Town Hall digs into heart of city payroll tax disagreement

Over 100 Salemites gathered inside the Elsinore Theatre Wednesday evening to hear from those leading the charge to pass or reject a proposed city payroll tax about how they should vote on the November ballot measure.

Salem Reporter’s Town Hall on Taxes was intended to be an informative discussion about what the income tax would mean for wage-earning and self-employed Salem workers earning above minimum wage for their work performed within city limits.  

“This is your occasion to hear directly information important to you to make your decision on your vote,” said Les Zaitz, Editor and CEO of Salem Reporter, during the event introduction.


The decision will mark a key turning point for the future of the city. While supporters of the tax say it could be the difference in how long a resident has to wait for an ambulance, those opposed argue it could be the difference in one’s ability to afford housing.

“I think in 100 years, people are going to be thinking about the decisions that Salem is making in November,” Reporter Abbey McDonald told the audience.

Reporter Abbey McDonald gives a background of the proposed Salem payroll tax at the Salem Reporter Town Hall Meeting held at the Elsinore Theatre on October 11 (Laura Tesler/Special to Salem Reporter)

The event featured one representative from each side. Salem City Council President Virginia Stapleton is leading the pro-tax campaign Save Salem. Preston Mann, political affairs director for Oregon Business & Industry, is campaigning against the tax after petitioning to put it on the ballot.

There was a consensus from both sides that the city needs more revenue than it is currently bringing in to sustain current services. Disagreement centered on whether the payroll tax is the most reasonable path forward for Salem.

City officials say the proposed income tax is intended to overcome a city budget shortfall and would pay for additional police and firefighters. Councilors in favor also say the tax would prevent impactful cuts to community services, including several homeless shelters that now rely on limited federal money. 

Those opposed say the tax is overly complicated because it taxes only wages earned within Salem city limits, and its cost would be too much for Salem workers.

Ballots are scheduled to go out on Wednesday, Oct. 18, to registered voters inside Salem city limits. Election Day is Tuesday, Nov. 7.

The Town Hall was streamed live and can be found on the Capital Community Media YouTube channel.

Salem City Councilor Viginia Stapleton responds to audience questions at the Salem Reporter Town Hall Meeting held at the Elsinore Theatre on October 11 (Laura Tesler/Special to Salem Reporter)

A costly choice

If the payroll tax fails, the city’s proposed budget cuts include closing the west Salem library as well as reducing hours and days at the main Salem Public Library, Stapleton said.

She also said the city would need to cut seven positions at the Salem Fire Department, five positions from the Salem Police Department, 13 positions across support services such as the city’s Human Resources, Information Technology and Legal departments, and seven positions from parks and maintenance crews.

Stapleton said the city would also need to cut youth services employees and homeless sheltering programs. That includes micro shelters, which the city has money for through June 2024, and the Salem navigation center, which has funding through June 2025. 

“At that point in time, we will need to cut those services if we do not find new revenue, and over 200 folks will find themselves back out on the streets,” Stapleton said. 

She added that such cuts will continue until the city finds new revenue options. “I think it’s important for all of us to remember what our downtown looked like just a few years ago. We will pay either way on this issue, and I would rather spend the money on proven programs that work to end homelessness,” she said.

If the payroll tax passes, she said the city would start a transparent rulemaking process where residents and business owners work with the city to decide the nuances of how it will be implemented – such as its impact on remote workers and delivery drivers who go in and out of city limits. 

Mann said he finds the proposed tax troubling because most residents are not clear on when they enter or exit city limits.

Regarding the rulemaking process, he said, “What that really means is you have to pass it to figure out how it’s going to work. That doesn’t sit well with me.”

The tax would cost about $500 a year for a Salem worker earning the city’s average wage of $29.90 per hour.

Mann said as much as the city budget might be in a crisis, he said, family budgets are as well. “That’s a lot of money, and frankly, I don’t think people can afford that.”

He recalled a woman who tearfully testified at a city council meeting. She did not live in Salem but worked in the city, and she said the tax would likely force her to quit working to keep her health care. “That’s the kind of decisions that folks in this community are going to have to make if this tax moves forward,” he said.

Preston Mann, political affairs director for Oregon Business & Industry, speaks at the Salem Reporter Town Hall Meeting held at the Elsinore Theatre on October 11 (Laura Tesler/Special to Salem Reporter)

How Salem got here

City leaders say the issues that spawned the need for a payroll tax date back to more than two decades ago.

Local governments in Oregon are mostly funded through property taxes, but two ballot measures in the 1990s — Measure 5 and Measure 50 — capped the rate cities could tax residents at and limited how quickly property taxes can grow.

Stapleton said as a result, the cost of providing city residents with basic services has grown faster than the city’s ability to raise more revenue from property taxes.

Voters could authorize the city to collect additional property taxes through a levy to pay for city services. Stapleton said city leaders opted not to pursue that option because state law caps the total taxes all local governments can impose on a property. The effect, she said, is that if Salem imposed a levy, many properties in Marion County wouldn’t pay the full amount because they’re already being taxed at the maximum rate allowed by law.

Mann said that while he is sensitive to Stapleton’s concerns about levies in Marion County, a key benefit is that levies are not permanent because voters have to reauthorize them.

He also said that unlike Eugene’s city payroll tax, the proposed tax for Salem has no cap on the total amount collected rate limit. “There’s nothing stopping the city council today from having that same conversation and putting their own cap in place. I think that would be a gesture of goodwill towards this community,” he said.

Salem Reporter Editor Les Zaitz gives an introduction at the Salem Reporter Town Hall Meeting held at the Elsinore Theatre on October 11 (Laura Tesler/Special to Salem Reporter)

City vacancies

City leaders have billed the payroll tax as a matter of public safety while already short on emergency responders. Salem police had 23 vacant officer positions as of Wednesday, Oct. 11, according to department spokeswoman Angela Hedrick.

When asked why taxpayers should give the agency more money with nearly two dozen positions still unfilled, Stapleton said police staffing is often cyclical and many people have recently retired.

“There are historically times when it is harder to hire for public service positions, and the police department has been having that challenge over the last few years,” she said.  “As we are looking forward, that trend is starting to change and we are starting to see more people take an interest.”

Stapleton said she’s heard from many who believed that by initially voting on the tax without putting it on the ballot, the city council did not trust citizens to decide the future of the payroll tax on their own.

She said if it hadn’t gone to the ballot, the council would have put the issue before voters within seven years after the tax was approved. The plan, she said, was to maintain services without making cuts and while educating the public about the matter. 

She said it would take about two years for the city to implement the tax and collect revenue. Councilors wanted to seek public approval after they had results to show from the tax revenue, she said.

Stapleton said it would have been far less expensive for the city to refer the issue to voters during a primary or midterm election, rather than now. She said the current effort is costing the city about $250,000.

Mann said it is important to consider that many of the city positions at risk of being cut are not current employees, but positions that remain unfillled.

He also said he believes the payroll tax was a sincere effort to protect some minimum wage workers.

“I can appreciate that, but also think back to my high school days when I was a pizza delivery driver in this town, I got a 10 cent raise over minimum wage,” he said. “Under this tax, if it would cost me less to just stay at minimum wage, I think that’s fundamentally unfair.”

Stapleton and Mann took several questions from Salem residents, which focused largely on alternatives to the payroll tax, the logic behind the tax and how it would work. 

Salem Reporter is following up on factual questions which audience members submitted about the tax to be answered in an impending story.

Members of the audience at the Salem Reporter Town Hall Meeting held at the Elsinore Theatre on October 11 (Laura Tesler/Special to Salem Reporter)

Contact reporter Ardeshir Tabrizian: [email protected] or 503-929-3053.

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Ardeshir Tabrizian has covered criminal justice and housing for Salem Reporter since September 2021. As an Oregon native, his award-winning watchdog journalism has traversed the state. He has done reporting for The Oregonian, Eugene Weekly and Malheur Enterprise.