In two weeks, Salem voters will decide the fate of a controversial wage tax that would help pay for an array of services, including libraries, homeless shelters and firefighting. In July, the Salem City Council narrowly approved a tax of nearly 1% on wages of people working in the city. Minimum wage earners would be exempt from the tax, which would raise roughly $500 a year from the average Salem worker, according to reporting by the Salem Reporter.
A statewide lobbying group, Oregon Business & Industry, gathered thousands of signatures to place the issue on the ballot and has raised more than $180,000 to defeat the tax. The group says the tax is too high, burdensome on employees, and would be difficult to comply with.
“Over $500 a year for families right now is a lot of money,” said Preston Mann, political affairs director of Oregon Business & Industry. “Folks are struggling and as much as I am sympathetic to the city’s concern about the city’s budget, I’m even more sympathetic to families’ budgets right now.”
The Committee to Save Salem, which supports the measure, says the tax is necessary to avoid cuts to city services outlined in a recent memo from the city’s chief financial officer. They include closing a city library branch, eliminating positions in the police and fire departments and slashing shelter beds for people experiencing homelessness.
“If (the measure) fails, we are just going to have to be right back to the drawing board,” said Virginia Stapleton, Salem City Council president and co-founder of the Committee to Save Salem. “Not only does it protect the livability of the city, things like parks and libraries, and of course our emergency response, with police and fire, but those unhoused services are just so critical to everything in the city of Salem, whether it’s neighborhoods, businesses, all of those combined.”
Mann also questioned how the new tax would be enforced and calculated for those who don’t work in a traditional office environment.
“It’s one of the most complicated pieces of tax policy I’ve ever seen, and from my perspective, it simply doesn’t work,” Mann said. “How is a pizza delivery driver to know when they’ve crossed the city line or not … How frankly, is the city supposed to know if employers and employees are presenting an accurate representation of that time when nobody really knows how to track it?”
Stapleton said the tax would be “very simple” and “a very straightforward process” for the majority of people working in Salem. “We recognize that there are issues within different types of delivery systems and folks who have a complicated part to this, and we’re ready and willing to work with them,” she added.
Mann said he was “a big fan” of levies as an alternative to the kind of tax Salem city officials want to impose. “I think levies require a conversation from local governments and voters that require (them) to be reauthorized.”
A levy would raise property taxes, and according to Stapleton, the impact would mainly be felt in Polk County. That’s because some property owners in Marion County are already paying the maximum amount allowed under law on their property taxes. “(It) would be very unfair to our Polk County side of the city — we’re in two different counties … So it would be not equitably spread out around the city and for people using the services,” she said.
Ballots in the November special election in Salem are due on Nov. 7. If the ballot measure passes, the city can start collecting the payroll tax at the start of the next fiscal year on July 1. A Salem City Council session is scheduled to take place Wednesday to continue the discussion of possible budget cuts to shore up the city’s finances without the revenue generated from the tax.
Virginia Stapleton and Preston Mann spoke to “Think Out Loud” host Dave Miller. Click play to listen to the full conversation:
