Salem voters overwhelmingly rejected a payroll tax, according to the first round election results released Tuesday night, meaning city leaders will have to seek money elsewhere or make deep cuts to balance the city budget in 2024..
In Marion County, 82% of Salem voters rejected the tax, with 25,111 votes counted.
In Polk County, which includes west Salem, 84% of voters opposed the tax, with 7,088 votes counted. Kim Williams at the county clerk’s office said that the Tuesday night total would include the majority of ballots submitted.
The measure would have imposed a 0.814% tax on all wages earned in the city above minimum wage to sustain and expand police, fire and homeless services in Salem. A worker earning the city’s average wage would have paid about $500 a year.
Turnout as of Tuesday night was 25% in Marion County and 34% in Polk County.
Marion and Polk County elections offices will continue to count each ballot that was mailed or put in a dropbox before 8 p.m. on Tuesday. Additional ballots will be added to the count by 5 p.m. Thursday
“We knew going in this was going to be a challenge. We know that passing a new tax is very difficult,” Mayor Chris Hoy said Tuesday night. “(The voters) had the option tonight, and they obviously made a decision. And so now we’ve got to get to work on what are the next steps because the things that this was going to fund are critical.”
“We just can’t make cuts as drastic as will be necessary without the revenue, so we’ve got to come up with a new plan,” Hoy said, adding that nothing is off the table when it comes to revenue options, including a payroll tax in a different form. He said the city council is going to take lessons from this election before making a new decision.
Scotty Nowning, president of the Salem Police Employees Union, said he was not surprised by the result.
Nowning said many of the officers and community members he had talked with expressed that they would have preferred to see the tax more directly prioritize the city’s police and fire departments. Though the tax was billed as supporting public safety services, he said how it would have been allocated was too open-ended.
Even if the tax passed, Nowning said the city still would have been nowhere near the number of officers it needs in an already understaffed police department.
“Hopefully, this will get folks back to the table and figure out funding sources that are going to be appropriate and long-term,” he said. “What I’ve been hearing from a lot of community members that I speak to about it is, ‘If it were more for police and fire, I would be much more willing to have a conversation about it and more willing to potentially vote for something like that,’ but it just wasn’t.”
The Salem City Council first passed the tax on July 10 in a narrow 5-4 vote, after a public hearing where most citizens spoke against the tax. After the vote, those in favor said they believed it would prevent impactful cuts to community services and that they would not have the time to convince voters to approve the measure in a campaign, while those opposed said they wanted the tax brought before voters.
On July 14, the statewide business group Oregon Business & Industry filed a petition to refer the tax to the ballot which gathered thousands of signatures by August to put it before voters in the Nov. 7 special election.
In the months that followed, OBI raised nearly $195,000 in cash and in-kind contributions as of early November for the campaign to kill the tax, including contributions from local businesses and the Salem Area Chamber of Commerce.
“This result is not at all surprising. It’s just unfortunate that it had to play out this way,” said OBI Political Affairs Director Preston Mann in a statement Tuesday night. “The opposition to this campaign was emphatic and immediate. Complex, costly and unique taxes that address local shortfalls create significant problems for employers and employees. Voters agreed.”
The “Save Salem” campaign in favor of the tax, led by Council President Virginia Stapleton, raised less than $6,000, nearly a third coming from individual contributions under $100.
“Save Salem has been, from day one, a campaign to educate voters. Though we didn’t reach as many voters as we hoped, we appreciate everyone who agreed that this was the right approach,” Stapleton said in a Save Salem press release.
“The City Council now faces the daunting prospect of cutting millions in services to balance the budget while working with residents across the city to secure another revenue stream. We don’t have a choice on securing new revenue. We have to get to yes on something,” she said.
In a town hall hosted by Salem Reporter Mann and Stapleton answered questions about the tax. 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.
Mann said the tax was overly complicated and would burden small businesses and household budgets. Stapleton said without new revenue, cuts to the city would close homeless shelters and make emergency response slower and less effective.
Without the $27 million a year estimated from the payroll tax, the city plans to cut spending on services to preserve its financial reserves. Their baseline proposal for cuts over the next five years, which councilors will continue to discuss, includes pulling funding from homeless shelters, closing the West Salem Branch of the library, reducing park maintenance, cutting specialized police teams and closing a fire station.
Kathy Knock, president of AFSCME Local 2067 which represents 600 city employees, said the outcome of the vote was not a surprise.
“I hope that city council will have some serious conversations about finding new revenue. I think some of the ideas that have been brought forward like furloughs and not filling vacancies are not viable long term solutions,” she said, referring to options the council discussed during an Oct. 25 meeting.
Knock said the tax brought a good opportunity to talk about what’s important to the community, and that she hopes the union’s next contract will have competitive wages to address the city’s 80 vacancies. The current contract expires June 30, 2024.
“The work has to be done and the community has to come together and decide: if you’re not going to pay for it, what is it you want to go? And there aren’t a lot of options,” she said.
The city is planning to convene a revenue task force to seek additional options for bringing in money for city services. The city’s last revenue task force met in 2018, and their recommendations included adding the operations fee to utility bills and implementing a payroll tax.
Councilors will likely be participants in the task force. City staff plan to return to the council with a proposal for forming the group in the coming weeks.
Voters in Marion County Fire District No. 1 narrowly supported a levy that would keep nine firefighters hired under a 2021 federal grant on duty. The measure would cost about $83 more per year in property taxes for homeowners in the district, which includes the Four Corners area and portions of east Salem outside city limits.
About 52% of district voters, 3,204 people, voted yes on the levy, while 48%, or 2,976 people, voted no, according to initial results Tuesday.
The levy comes as the district is reporting a 30% increase in calls for service since 2020. It would generate about $20.5 million between 2024 and 2029.
Marion County’s initial vote tally includes ballots received by Tuesday morning, county Clerk Bill Burgess said. The next ballot tally will be updated Thursday by 5 p.m. and include ballots received by Tuesday evening.
Ballots postmarked by Election Day can still be counted if they’re received within seven days, but Burgess said the initial tallies represent the “lion’s share” of votes cast in the election.
Ardeshir Tabrizian contributed reporting.
This story was updated at 10 p.m. Tuesday with reactions from both campaigns, union leaders and Mayor Chris Hoy.
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.