What’s next for city of Salem effort to get state to cover public safety costs

Listen to the audio version of this article (generated by AI).

There’s one idea to fix Salem’s budget crisis that nearly every local elected official agrees on: the state of Oregon should chip in.

It’s a common refrain at town halls, among city councilors and in citizen comments sent to city government and local news outlets. Gov. Tina Kotek agrees, saying she’ll sign a funding bill if it passes the Legislature.

The case for such payments is that city employees are working on state property that pays no property tax.

City fire trucks respond to medical emergencies at the Capitol and state hospital. Salem police monitor traffic and street closures during frequent protests on the Capitol Mall.

City officials say 8% of land in Salem is state owned. That’s not on the tax rolls to support city government, local schools and more. If the state paid property taxes as any other property owner, Salem alone would collect more than $7 million per year.

“We believe we have a very strong case to make for a funding ask,” said state Rep. Tom Andersen, a Salem Democrat who introduced legislation to set up such funding.

For Salem voters and politicians, it’s an appealing prospect. The extra state money could save some city services that otherwise might be cut.

Getting legislators to approve that money has proven challenging. Salem lawmakers have failed for years. 

Even if the money comes through in 2025, it won’t solve Salem’s larger budget problems or eliminate the need for deep cuts.

First, the amount the state would pay would fill only half the shortfall that city officials say they face to keep current services going.

Second, the money would come as part of the state’s budget, which is passed at the end of the legislative session, typically in June. That means voters won’t know if Oregon is coming to the rescue until after the May vote on the city’s tax levy.

And June is too late for city officials to make large revisions to their budget, which legally must be adopted by July 1.

Finally, the money from the state under Andersen’s proposal would be earmarked for public safety services – police and fire – not the library, parks and Center 50+ services now on the chopping block. 

Here’s a look at what’s on the table now, how it would change things for Salem’s budget, and why it’s been so hard for the city to make progress.

What’s been proposed, and how likely is it?

Andersen’s HB 2531 creates a capital district in Salem funded by the state. Oregon would pay the city $7 million per year for the next two years, with the money earmarked by law for emergency services.

Other states have similar agreements with their capital cities, such as in Olympia, Washington, and Trenton, New Jersey.

Andersen’s legislation didn’t survive this session but there’s still a chance at the money. He and other Salem legislators are holding out hope the money can be worked into the state budget and so-called “Christmas tree bill.” That is an end-of-session tradition funding special projects around the state typically hashed out behind closed doors.

The effort has support from Rep. Kevin Mannix, a Salem Republican, Sen. Deb Patterson, a Salem Democrat, and other Salem-area legislators.

Andersen is optimistic, noting that the funding request is “a relatively small portion of the state budget, approaching miniscule, but it is a very important part and amount to the people of Salem.”

Whether it gets through will depend in large part on the state’s May revenue forecast. State economists estimate how much Oregon will collect in taxes and will be available to spend.

 Uncertainty over federal spending and threats to federal grants may also persuade lawmakers to budget more conservatively or earmark state tax collections to pick up services once funded through the federal government.

Does the state of Oregon pay Salem anything now?

Yes, the state makes some payments to Salem, but they’re for other services.

The state is charged for water service to state buildings, for example.

And the Salem City Council in March approved an agreement removing one traffic lane of State Street along the Capitol to for added security. That cost the state one $2 million payment for an arrangement to last 10 years.

Where would the money go?

If any budget deal for Salem designates extra money go to emergency services, city officials could increase Salem police and fire budgets.

They could also use it to cover the existing police and fire budgets, freeing up more money in the city’s general fund for libraries, parks and other services.

If the funding passes the legislature, city councilors would adopt a supplemental budget detailing how the money would be spent, according to city spokeswoman Courtney Knox Busch. That means there would be public meetings and a chance for people to weigh in.

Why is it so hard for Salem to get paid?

Lawmakers for years have floated the idea of an annual state payment, but the effort has taken on increasing urgency in recent years as Covid relief money has expired, inflation has picked up and many local governments are short on cash.

A few factors have made the request challenging.

First, Salem isn’t the only city in Oregon with a large share of tax-exempt state land. Cities that host state universities, including Monmouth, Eugene and Corvallis, also have large areas of property off tax rolls and face budget challenges. 

Getting funding through means convincing legislators from the Portland area and across the state that Salem’s challenges and costs as the capital merit special treatment.

Salem’s legislative delegation is relatively new to the job. None hold leadership roles in the House or Senate, or in their respective caucuses. No Salem legislators sit on the Joint Ways and Means Committee, which controls the state budget.

Many of the lawmakers now representing Salem began their terms when Oregon was flush with money and new spending was more readily considered.

That’s not the case now.

For years, Salem had two powerhouse legislators who could ensure city priorities got heard or funded. Senate President Peter Courtney, the longest serving legislator in Oregon history, and Sen. Jackie Winters, a legislator for two decades until her death in 2019, could direct millions to priority Salem efforts.

“These people were really titans of the legislature and that kind of gets overlooked,” said Justin Martin, a Salem lobbyist who represents entities including the Confederated Tribes of the Grand Ronde and city of Salem.

Legislators in 2024 had competing priorities with housing and homelessness and the repeal of drug decriminalization. Transportation funding has been a major focus in 2025. 

Contact reporter Rachel Alexander: [email protected] or 503-575-1241.

A MOMENT MORE, PLEASE– If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE.