Election results: Voters reject Salem payroll tax
The effort to institute an employee-paid payroll tax on Salem workers failed, according to ballot returns Tuesday night.
Salem voters were tasked with deciding whether to enact a payroll tax on employees who work within city limits.
Returns posted at 10:30 p.m. Tuesday night showed an overwhelming vote against the tax.
Proponents conceded defeat, and opponents of the measure declared victory.
“The people of Salem sent a clear and decisive message that should echo through every corner of our state,” said Preston Mann, Oregon Business & Industry's director of political affairs and chief petitioner on the referendum to overturn the tax. “Oregonians do not support costly, complicated, and convoluted tax increases, especially when those tax increases come with so little accountability for how the dollars will be spent or managed."
OBI President and CEO Angela Wilhelms said there are lessons to be learned from the payroll tax's defeat.
"As local governments across the state take stock of their own unique budgets, we urge elected leaders to be mindful of today’s outcome and to work in good faith and partnership with their respective communities when deciding to pursue new revenue," Wilhelms said.
Those in favor of the tax to shore up finances that show multi-million dollar deficit at current spending levels faced a groundswell of opposition and were being outspent by more than $200,000.
The issue came to voters following a contentious public debate and vote by Salem City Council in July to impose a .814% tax on wages for people working in Salem, regardless of where they live, as early as July 2024.
The tax would have generated $27.9 million annually and cost a person earning the average hourly rate of $29.90 the equivalent of $506.24 a year.
In the days following the council's vote, Oregon Business & Industry, a statewide chamber of commerce and trade association, launched an effort to refer the tax to voters.
Officials with Let Salem Vote said the proposal was vague, the tax too high, the administrative burden significant and there was little assurance as to how the funds would be spent.
The group successfully got the more than 3,986 verified signatures needed to qualify for the ballot.
Many of those involved in the referendum continued to campaign against the tax during election season. The Defeat the Tax on Salem Workers committee raised $213,138 in cash and in-kind contributions as of Nov. 2, dwarfing funds raised by supporters of the tax. The Save Salem campaign has raised $6,046 in cash and in-kind contributions as of Nov. 2.
Virginia Stapleton, Salem City Council President and member of the Save Salem group, said city council now faces the daunting prospect of cutting millions of dollars in services while balancing the budget and seeking another revenue stream.
"We don’t have a choice on securing new revenue," she said. "We have to get to yes on something.”
Revenue from the tax was set to be used for police, fire and homelessness services. Without new revenue from the tax, city officials have talked of eliminating all homelessness services like the navigation center and freezing new hires for many positions, including police and fire.
Other cuts include:
Eliminating new positions for the homeless camp response team.
Closing the West Salem library branch.
Stopping the ability of Salem Police to investigate high-level drug trafficking cases.
Cutting funding to the city's 180 temporary microshelter beds.
Cutting library hours.
Closing splash pads, drinking fountains and bathrooms at city parks.
Closing two fire stations.
Proponents of the tax say the cuts would be disastrous for the city, eliminating progress made locally to address homelessness and making the city less attractive for residents and visitors.
"I'm hearing from a lot of people who are leaning into the issue and asking really meaningful questions," Stapleton said. "I think folks are finding it to be a hard decision to come to, there are so many important issues on the table and raising revenue for the city is critical, people realize that. They know that their vote has consequences."
Stapleton said she was proud of the grassroots funded by small donations, unlike their opposition, "who had deep pockets in the business and far-right communities."
She said from the beginning, Save Salem's goal has been to educate people about city services, the impact of statewide measures on property tax measures and the challenges facing funding. No matter the outcome, Stapleton said she considers their work successful.
Paul Tigan, former Budget Committee chair and Save Salem volunteer, said the "no" vote will cost everyone something.
“It would be an embarrassment of national proportion if Oregon’s Capital city chained the doors on its library — especially while the state sat on $4 billion and sent another $5.5 billion to voters,” said Tigan, referring to the state’s historic budget surplus and tax kicker. “We tried to communicate to voters just what was at stake if they voted ‘no.’ Now the question is how much damage can we avoid before another solution is found?”
The failure of the measure doesn't mean the funding problem will not go away; it will only get worse, he added.
Dr. Irvin Brown, who serves on the Citizen Budget Committee, said many voters believed cutting library, police and fire services would be the wrong decision. He said that cutting funds targeted to help the unsheltered population would be inhumane.
"Despite this loss, we are in this together," Brown said. "Time to roll up our sleeves and get back to work.”
Mann, with OBI, said the group has spent the last several weeks encouraging Salem residents to turn in their ballots.
"We are grateful to the Salem community for recognizing such a flawed piece of public policy, and for so decisively rejecting it," he said.
For questions, comments and news tips, email reporter Whitney Woodworth at wmwoodworth@statesmanjournal.com call 503-910-6616 or follow on Twitter at @wmwoodworth
This article originally appeared on Salem Statesman Journal: Election results: Voters reject Salem payroll tax
