City of Salem – 07/11/23 12:00 PM
Payroll Tax Will Help Retain Essential Services: Police, Fire, Homeless Programs
SALEM, Ore. – An employee-paid Safe Salem payroll tax, approved by the City Council on Monday, July 10, is expected to generate approximately $28 million annually to fund essential services, such as police, fire, and homeless programs.
The council voted five to four in favor of the payroll tax despite having a majority of the public in attendance, emails and texts against it.
“This is a proactive step toward avoiding a funding crisis that would drastically impact safety services,” said Salem Mayor Chris Hoy.
The Safe Salem payroll tax will go into effect no sooner than July 1, 2024. About half of the funds will be used to stabilize current police and fire services. The other half will fund programs focused on expanding fire, police, and shelter efforts — identified by our community as top priorities.
“These services benefit everyone who lives and works in Salem, including those who commute here for work,” Hoy said.
Salem is one of many Oregon cities projecting a deficit in their General Fund due to property tax limitations. For fiscal year 2024, $11 million in general fund reserves were needed to balance the budget.
“We recognized our looming deficit in 2018 and promptly began looking at ways to avoid a crisis,” Hoy said. “Federal COVID funds have run out, and we’ve reached a point where we can no longer cut staff or services and maintain a safe city. Our ability to serve the public has already diminished.”
The City of Salem was forced to consolidate positions and lay off employees in 2008. Since then, Salem has grown by 26,000 people — equivalent to the population of Woodburn — but City staffing levels have not changed. As more people choose to live in our community, the need for and cost of services increases each year, but revenue to provide those services grows at a slower rate.
Today, Salem’s fire department employs the same number of staff (43 people) and is fielding 85% more calls than 15 years ago. This is similar to police, who in 2010 fielded 16,910 calls, and in 2022 fielded 31,319 calls. In most areas of Salem, fire and emergency services staff are now unable to meet the federal emergency response time expectation of five minutes and 30 seconds or less.
“Any further reduction of staff would have negative long-term impacts, including life-threateningly slow response times for police, fire and emergency services,” Hoy said.
The 0.814% Safe Salem payroll tax will cost the average Salem worker $1.39 per day, around 50 dollars a month or about $600 a year. Employees earning minimum wage will be exempt. Businesses with an address in Salem will collect the funds on behalf of their employees. Specifics on how the funds will be remitted will be available prior to the start date.
The Safe Salem payroll tax will:
- Fund the Navigation Center that serves people without shelter
- Fund the three existing micro-shelter community villages
- Stabilize current police staff
- Fund new community policing
- Stabilize fire and emergency response staff
- Fund staff for the fire station to be built with 2022 voter-approved bond funds
- Fund and expand the police homeless outreach team
The City of Eugene implemented a similar community safety payroll tax in June 2021 to provide long-term funding for community safety and shelter services. Although the tax rate for Eugene employees is lower than Safe Salem, Eugene residents pay additional taxes in the form of levies for special districts like those for its parks and library.
Approved by the City Council, the Safe Salem payroll tax will take effect on August 9, 2023 and be referred to the voters for possible renewal in 2031.