close
close

Yiamastaverna

Trusted News & Timely Insights

    • Salem’s property tax levy could be voted on in May 2025
    Idaho

    Salem’s property tax levy could be voted on in May 2025

    Madoc Meredith Posted on

    play

    Salem residents will likely vote next year on raising a property tax to help offset a multi-million dollar deficit in the city’s budget.

    The details of the plan, including what the levy would fund and when it would be voted on, have yet to be decided.

    Salem leaders met for a work session Monday to discuss various funding scenarios – and the layoffs, fire station and library closures and service cuts the city would face if new revenue is not generated.

    The decision before them seemed to weigh heavily on the group.

    “Tonight is the most important conversation we will have this year, perhaps even in years to come,” said City Manager Keith Stahley. “This is the beginning of a conversation that will shape the future of the city for decades to come. We have big questions before us, and we must begin to find answers to them tonight.”

    Hundreds in the community have lobbied for a “living levy” to fund the library, parks and the Center 50+. Dozens have spoken in favor of the levy. During the meeting, leaders mentioned the possibility of a public safety levy to fund police and fire departments. A proposed rate would mean the owner of a $300,000 home would have to pay $500 more in property taxes per year.

    Stahley outlined three possible timing for such a levy.

    Option 1: Salem levy will be put to voters in the May 2025 election

    Option 1 would be to put the property tax collection to a public vote in the May 2025 election. If passed, only limited cuts would be expected in the 2026 budget and the city would begin receiving funds in November 2025.

    The council would need to vote by the end of February to bring the issue to a vote. The benefits of a May vote include limited cuts and the ability to vote again in November if the measure fails.

    The downside is that with the elections in May, there is little time for education and public relations work.

    Option 2: Salem levy will be put to voters in the November 2025 election

    Option 2 would be to vote on the measure in November 2025 and make significant budget cuts in the meantime. If passed, funds would be received by November 2026 and would first have to be used to restore services.

    Option 3: Salem levy put to voters in November 2025 election, cuts limited by using city cash balance

    Option 3 would be to vote on the measure in November 2025 and limit the cuts by using the city’s fund balance. This option means that services could continue, but depleting the fund balance would have a negative impact on the city’s credit rating. If the measure fails, the city would have to immediately lay off a large portion of staff.

    Task Force recommends taxes and duties in Salem

    The second working session following the completion of the city’s Revenue Task Force took place on Monday.

    The group was convened in January to discuss ways to raise revenue and eliminate the city’s multimillion-dollar budget deficit. The group met seven times, considered feedback from eight focus groups, three town hall meetings and a statistically valid survey, and deliberated on revenue recommendations for the City Council.

    The meetings ran parallel to the Participatory Budget Committee, which discussed various cuts and service reductions to address the gap between revenue and expected services. Several key items, such as library jobs and hours, park events, water features and drinking fountains, were on the brink of collapse until they were saved by the reallocation of one-time funds.

    A property tax, an income tax, business tax and tax reform were some of the recommendations made by the Revenue Task Force during its first working session in July. The recommendations must be voted on by the council before they can be implemented.

    Stahley focused on two recommendations: an increase in concession fees and a local property tax. He said the city would also lobby the state legislature to pass a tax replacement payment due to the large number of state-owned properties in the city.

    City Councilor Trevor Phillips said he supports putting the levy on the ballot in May.

    “Time is of the essence, and we simply don’t have time,” he said. “No matter what we try to stretch things out, we just end up with a draconian cut to life-saving, essential services.”

    Salem’s payroll tax failure weighs heavily on city council

    During Monday’s conversation, it became clear that the process would not be completed until the end of the year, when four council members and the mayor will leave office. Council members Phillips, Virginia Stapleton and Jose Gonzalez have decided not to seek re-election. Council member Julie Hoy will replace Mayor Chris Hoy, leaving her seat vacant until a special election in May.

    The city leadership emphasized that they want to get as much work done as possible so that the city councilors can get off to a full start next year.

    The failure of the payroll tax was also a big topic that night. The council voted to pass the 0.814% payroll tax on all work done in Salem last year to help fix the budget deficit.

    The tax would have raised $27.9 million annually and cost a person earning an average hourly wage of $29.90 $506.24 per year. It was intended to fund police, fire and homeless services.

    Oregon Business & Industry, a statewide chamber of commerce and trade association, launched an initiative to put the tax before voters, but the payroll tax was overwhelmingly defeated in the November special election.

    “It’s been turbulent and difficult,” Stahley said. “It’s been challenging and impactful, to say the least. It feels like we’ve been discussing our budget and our revenue needs nonstop for the last two years. I think that’s worn us all down a little. During that time, the payroll tax was firmly opposed and we learned that our community wants to be involved.”

    Community will be critical to adoption of measures in Salem

    The approval of the community and the municipal council will be crucial for all future decisions, Stahley said.

    Salem politicians agreed to conduct a poll to find out what type of tax voters would support.

    “I think we need to do surveys,” said Mayor Chris Hoy. “I think it’s important to find out what the community wants to prioritize and pay for. I think it’s important that we look at a combination of services and not just individual issues.”

    Stahley pointed to the success Gresham recently had with the passage of the first property tax in its 119-year history.

    Gresham voters passed the levy to maintain and create new fire and police jobs in May. An earlier measure to fund homelessness and public safety failed when put to voters in 2023.

    “Gresham did the work,” Stahley said. “They shared a vision and shared it with the community.”

    He said city leaders have informed their community through mail and grassroots initiatives.

    They went to fire stations and held open houses. They gained support from all sides, from the Chamber of Commerce, construction companies, real estate agents, neighborhood associations and social services.

    “They were successful because they pulled together and had the same clearly defined goal,” Stahley said. “If we decide to go in that direction, we need to do the same.”

    For questions, comments and news tips, please email reporter Whitney Woodworth at [email protected], call 503-910-6616 or follow X at @wmwoodworth.

    Tagged:

    LEAVE A RESPONSE

    Your email address will not be published. Required fields are marked *

    Madoc Meredith
    View all posts

    You Might Also Like

    ads