The Salem Area Mass Transit District (Cherriots) has decided to delay a vote on its proposed employer-paid payroll tax, opting instead to form a joint committee with local business leaders to develop a new funding framework for public transit. The decision, made during the board’s October 15 work session, marks a shift from immediate legislative action to a longer-term, collaborative process aimed at reaching consensus by mid-2026.
The proposed 0.7% payroll tax, originally slated for board consideration on October 23, was expected to generate roughly $39 million annually to fund expanded bus service, longer operating hours, and improved weekend routes beginning in 2027. But pushback from a coalition of six local business and real estate organizations — led by the Salem Area Chamber of Commerce — prompted the board to reconsider its timeline. Board Chair Maria Hinojos Pressey said the decision reflected a need to “hear what employers are thinking and what they would like us to consider,” while still balancing “the needs of having a strong transit system.”
Business Coalition Calls for “Partnership, Not Pressure”
At Wednesday’s work session, Chamber CEO Tom Hoffert spoke on behalf of a coalition representing hundreds of local employers and property owners — including the Salem Chamber of Commerce, Keizer Chamber of Commerce, SEDCOR, West Salem Business Association, Homebuilders of Marion & Polk Counties, and the Mid-Valley Association of Realtors. The group emphasized that while the business community supports transit improvements, stability for small employers must remain a top priority. Hoffert said the coalition’s “desire is to reset the table and add place settings for employers to meaningfully participate,” explaining that their goal “is not to oppose progress, but to stand up for fairness and balance.”
Hoffert praised Cherriots’ contributions to regional mobility but warned of the “trickle-down impact” that could follow a new payroll tax, explaining that “no tax ever stops at the top line of a business ledger — costs get passed down, wages stall, hours shrink, prices rise — and the weight eventually lands on the same people every time, the very ones this community is supposed to protect and assist.”
The Coalition’s Proposal
The coalition presented three guiding principles it believes should shape any future funding approach. The first centers on creating a single joint committee between Cherriots and the business coalition to identify efficiencies, ridership strategies, service expansion needs, and funding solutions. Contrary to some early discussion, the coalition did not propose including citizens or riders as members; that suggestion came from Cherriots and remains a point for negotiation. The details — such as how many members will serve and who will represent each side — will be determined through ongoing talks. Cherriots is expected to present a formal proposal, and the coalition will have the opportunity to review and respond.
The coalition’s position calls for the committee to cooperatively review and assess the current transit system to identify where efficiencies can be found and resources better utilized to maximize ridership and system performance. “Our goal is to explore solutions together, not in isolation,” Hoffert said, describing the committee as a framework for “building trust through shared accountability.”
A second principle calls for a shared-responsibility model where those who use the system contribute something, and those who employ workers aren’t asked to carry the cost entirely. Hoffert said such an approach reflects Oregon’s transportation philosophy, where “shared responsibility is a pillar between the state, counties, cities, and road users.” He noted that Cherriots has not raised fares in over a decade despite inflation rising more than 30 percent, while TriMet and Lane Transit District (LTD) both charge higher fares per ride than Cherriots’ current $1.60. Youth riders in Portland pay $1.40, and in Lane County $0.85, yet Cherriots provides youth rides at no cost. “There is little to no buy-in from those utilizing the system most,” Hoffert said, adding that “we must promote equity by collecting fares in some proportion to taxes imposed on others. Asking one segment of our society to bear the entire burden is simply not equitable.” Polling shared with Cherriots on September 25 showed that local residents widely view a payroll-tax-only model as “grossly unfair.”
Finally, the coalition urged the district to conduct a transparent cost-benefit analysis linking each new dollar to measurable service outcomes, with Hoffert noting that “these are not radical ideas — they are the foundation of trust.”
Economic and Political Context
Cherriots’ initial tax proposal stems from a 2018 state law granting the agency authority to levy employer payroll taxes within the Salem-Keizer Urban Growth Boundary. Hoffert noted that the economic landscape has shifted dramatically since then, explaining that “we are in a very different space economically than we were eight years ago. Families are stretched thin, small businesses are fighting to keep doors open, and policy should adapt with those changes.”
Cherriots board members acknowledged those concerns while maintaining that the district’s funding model remains unsustainable. Unlike TriMet in Portland or Lane Transit District in Eugene, Cherriots is the only major Oregon transit agency funded partly through local property taxes, limiting flexibility to expand service. Even with roughly $11.5 million in new annual revenue expected from a statewide transportation package that doubles the existing employee-paid transit tax, the increase includes a two-year sunset clause, meaning it could expire in 2027 unless reauthorized by the Legislature. One board member noted that while Cherriots cannot make long-term hiring or service decisions on revenue that may sunset, it could make capital investments or improvements using that funding source.
A New Timeline and Shared Table
Under the revised plan, Cherriots will postpone first readings of its draft payroll tax ordinances (one for employers, another for self-employed individuals) while negotiations continue on the committee’s goals and composition — and will continue to postpone should the committee become active. The single joint body, expected to include representatives from both the Cherriots board and the business coalition, will meet regularly through early 2026, with the goal of presenting a revised funding proposal by June 2026. That timeline effectively pushes any new tax implementation to no earlier than 2028, allowing time for fiscal modeling, public engagement, and potential fare adjustments.
The coalition drew parallels to its prior collaboration with the City of Salem, where, after the city’s payroll tax failed at the ballot in 2023, the same business group partnered with city officials to identify $4 million in budget efficiencies. That effort helped close the city’s shortfall and build support for the Salem Livability Levy, which voters approved in May 2025. Hoffert said that experience serves as a model for how collaboration can replace conflict, emphasizing that “when business, government, and citizens work together, we find better answers.”
What’s Next for Salem’s Transit Future
The board’s decision to delay the vote may disappoint transit advocates eager for immediate expansion, but others view it as a chance to rebuild trust and create a funding plan with broad community backing. For now, Cherriots will continue operating under its existing budget, using state funds to maintain routes and pursue capital improvements. The board plans to revisit its tax discussions in mid-2026 following the joint committee’s recommendations.
As Salem continues to weigh economic vitality against mobility needs, the debate underscores how transportation policy often serves as a reflection of the region’s broader civic identity.