Salem city councilors expressed optimism after the city’s revenue task force presented its final recommendations on Monday, but no clear course of action emerged for new taxes or fees to address the city’s growing budget deficit.
The volunteer task force, appointed by councilors, convened in January and was charged with finding solutions to the roughly $15 million gap expected in the next year between city expenses and revenues.
After months of discussions, the task force was able to come up with eight options taken from 40 possible mechanisms to generate more revenue to help pay for city services such as the library, emergency services and other city operations.
It is the city council that will eventually consider adopting some of the recommendations, which could include imposing new fees or seeking voter approval for a property tax increase on Salemites.
“We wrote the menu, but we are not cooking the meal,” Scott Cantonwine, a task force member, told the city council Monday. “We are not responsible for how this comes out to the voters.”
The task force members presented eight options to the city council for consideration including a levy on property taxes, and an income tax.
Russ Beaton, a task force member, said the package could be sold to voters as a livability levy to fund the library, parks, recreation, and Center 50+, or as a public safety levy that would fund police and fire services.
“The task force…was faced with a syndrome from the start. It is a syndrome we are all familiar with. The folks want the services. The folks don’t want to pay for the services,” Beaton said. “The growing inequality of income and wealth in our society…has tended to move, ‘I don’t want to pay for the services, I want the services,’ to ‘I need the services, and I can’t pay for the services.’ This has put a squeeze on budgets everywhere and it is a syndrome we have long been familiar with.”
Now that recommendations have been made, councilors will spend their time working to better understand the options presented.
On August 19, the council will meet for a work session to discuss exploring revenue options. Next steps could also include additional financial analysis, focus groups, polling, and continuing community engagement and education, said City Manager Keith Stahley.
After a group of task force members presented the options, city councilor Trevor Phillips said he believed a levy would be a good way to move forward. It’s “the simplest, it’s been done elsewhere in Oregon, it’s been done successfully,” Phillips said. “I really look forward to hopefully getting some traction on something like a local option levy because we don’t have any wiggle room starting next year. Like, it’s gone.”
Stahley said some community members have asked if the council will advance a tax increase to voters in November.
“While this may be technically and theoretically feasible if council acted in early August, literally at our first meeting in August, it doesn’t really seem viable to me and I certainly would not recommend that course of action,” Stahley said.
City leaders are still dealing with the fallout from the council’s effort last summer to impose a deeply unpopular payroll tax on Salemites to address the city’s budget woes. Salemites ultimately defeated the tax with over 80% voting against it.
The task force’s recommendations were broken up into near-term options, which are within the city’s authority to implement and which would generate revenue within 1-2 years; medium-term options, which could generate revenue in 2-5 years, and long-term options which would require significant changes to state law or city policy or action on the part of other government agencies.
The near-term options include business license fees, franchise fee increases – meaning an increase in the fees the city charges to utility providers, which would likely raise bills for Salemites – and moving Urban Renewal Agency funds into the city’s operations funds, Cantonwine said.
Task force member Becky Beaman presented long-term options The first was a payment in lieu of taxes, where an organization like Marion County or the state of Oregon would pay Salem to compensate the city for the cost of providing services like police and fire.
City leaders have tried for years to secure an annual payment from the state without success.
“We don’t know how much you can get, but we think you ought to go for it,” Beaman said of the option. “It talks about going after not only the state government, but the county. I don’t know if you’d ever get the feds to cough up anything, but the county is a possibility. The nonprofits, probably not so much.”
Another long-term option is for the city to enter into agreements with other government agencies to reduce the city’s cost for providing homelessness services, Beaman said.
The final long-term option is tax reform or restructuring, Beaman said, which would make the tax system more efficient, effective, equitable and revenue generating for the city.
“The task force strongly recommends the council do additional work through a subcommittee or a separate targeted task force with the objective of shifting the city’s tax structure to a more equitable model,” Beaman said. “The city should consciously focus on making this simple for all those impacted by any new tax.”
City Councilor Vanessa Nordyke asked the committee members which out of the options presented Monday were most supported and most divisive within the task force.
“The short-term ones, people voted to kick them off the island at the last meeting. We didn’t want to present them to you,” Beaman said. “They were divisive. When we voted on them, they were close splits.”
Beaman said the income tax option, which would fall primarily on the business community, was one of the more popular options within the task force.
Nordyke expressed support for the payment in lieu of taxes option.
Councilor Linda Nishioka said she was pleased with the options presented by the task force. But she questioned the feasibility of working with other jurisdictions on providing homelessness services.
“Sounds great, but how long that might take and if it will be able to happen, I don’t know. That is something I hope we will be able to find out,” she said.
Nishioka said she agreed that funding homelessness services and mental health care is not solely the city’s responsibility, but said sharing the burden could be difficult.
“Being able to find help in other governmental agencies may be a huge challenge,” she said.
Contact reporter Joe Siess: [email protected] or 503-335-7790.
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Joe Siess is a reporter for Salem Reporter. Joe joined Salem Reporter in 2024 and primarily covers city and county government but loves surprises. Joe previously reported for the Redmond Spokesman, the Bulletin in Bend, Klamath Falls Herald and News and the Malheur Enterprise. He was born in Independence, MO, where the Oregon Trail officially starts, and grew up in the Kansas City area.
