Cross post from reddit

Salem City Council enacts nearly 1% income tax affecting those who work in Salem (even remote & commuters)

The City of Salem has an unbalanced budget they have known about and left unaddressed for more than several years. Tonight, the City Council voted a .814% employee-paid payroll tax in a 5-4 vote (tax is titled “Safe Salem”) that will be enacted July 1, 2024; but won’t be voted on by members of the public until 2030. There was an option for the Salem City Council to send this decision to voters for the November 2023 ballot, but they blocked that option saying that the budget shortfall is too dire and the timeline is too tight to refer the question to the voters.

The intent of the funding is to bolster community safety funding, including police, fire, and houseless services. However, there is no outlined recipient of the funding in the legislation.

The policy specifically says that minimum wage workers won’t be impacted by this tax, which is currently $14.20 an hour in Salem. However, anyone making $15/hour will pay about $250/year. (Editorial: The policy claims this is a reasonable equity response; a more informed, equitable design would involve a phase-in of the tax to higher incomes.)

The Safe Salem website says (https://www.cityofsalem.net/government/shaping-salem-s-future/safe-salem-2023#!/):

“This tax would apply to work performed within the city limits. This includes those who are self-employed, as well as remote workers and 70,000 commuters to Salem.” – As well as specifically calls out employees of the State of Oregon as responsible for the tax (45,000 employees). — As well as says that this new tax will not cure the budget shortfall and will most likely need to be increased in the future.

In the July 10, 2023 City of Salem City Council public meeting (https://www.youtube.com/live/BDxMag3u02E?feature=share): · The Council stated twice that remote State of Oregon employees wouldn’t be taxed; though there are no mentions of that in the legislation or any publicly available documents. · There were nearly 4 hours of public testimony, with only a few “yays” with every other member of the public requesting that the measure go to the ballot. · There were no carve-outs for the service industry, who generally make miminum wage plus tips. There was interest in considering that group in rulemaking. · Four Councilmembers and the Mayor (fifth vote) voted nay on extending the public comment period for this action for 7 days. · The same four Councilmembers voted yay, with the Mayor again being the tie-breaking vote. · A couple of the affirmative Councilmembers stated that they were there to do what was necessary but not popular.

Wanted to get the word out that the Salem City Council just imposed a nearly 1% tax on all workers in Salem for the next 10-ish years without proper public notification. They claim they did public engagement, but the list of organizations that were consulted in the process are all industry (section G of legislation below). There doesn’t seem to be deep engagement with communities of color on the topic from the public information available.

See the legislation here: https://salem.legistar.com/View.ashx?M=F&ID=12135575&GUID=B8AAF89A-A313-4886-A40E-AEF877773913

Original news story that caught my attention: https://www.statesmanjournal.com/story/news/local/2023/07/08/on-the-agenda-public-hearing-on-payroll-tax-at-salem-city-council-meeting/70387819007/