The cost of doing business in Salem and Keizer may be about to get more expensive as our local transit agency, Cherriots, considers implementing a new payroll tax to expand bus service. What’s worse, voters wouldn’t get a say in the matter.
This isn’t the first time businesses have been asked to foot the bill for proposed service improvements. In 2015, Cherriots asked voters to approve a separate payroll tax that would have raised $5 million per year. Then in 2023, the City of Salem pitched its $28 million-per-year “Safe Salem” payroll tax to fund police, fire, and homeless programs. Both were handily defeated at the ballot box.
Now, in a move that can only be described as tone deaf at best, Cherriots is back seeking $39 million annually. That’s $11 million more than the City’s payroll tax proposal that 82% of voters rejected. But thanks to a state law passed in 2018, this time Cherriots doesn’t need voter approval. The decision instead lies with its seven-member Board of Directors, not one of whom would actually pay this tax themselves.
Though the specific tax rate is still up for negotiation while the Legislature passes a new statewide transportation funding package, what’s clear is that this additional financial strain on employers comes with consequences. Even modest payroll taxes affect whether a small business is able to hire new employees, offer bonuses, or support community organizations through charitable donations. Consumers already on tight budgets would also face higher prices — all without a public vote.
Why is Cherriots able to do this? After the agency’s 2015 tax failed, lawmakers passed SB 1536 in 2018. That bill changed how Cherriots is governed, going from a publicly elected board of directors to one appointed by the Governor, giving its members taxing authority. Both TriMet in Portland and Lane Transit District in Eugene have the same structure.
The Salem Area Chamber of Commerce supported SB 1536 with the simple understanding that businesses would have a voice on the Cherriots board. The late Senate President Peter Courtney, who sponsored the bill, said as much in a floor speech on Feb. 13, 2018.
“This bill has something very special in it,” Courtney said. “It says the Governor, whoever the Governor is, has to go to civic groups here and has to go to business groups here to get recommendation as to who is on this board. It is my hope that way that I can definitely get businesspeople on this board.”
That has not happened. Of the seven Governor-appointed Cherriots board directors, three of them work for nonprofits based in Woodburn and four others work for state government. None are business owners, and none would pay this tax, bringing to mind the old expression, “taxation without representation.”
Still, Cherriots insists it is listening and has embarked on a series of open house-style public meetings to gather input. There you will find information on specific improvements the agency is proposing, from increasing service frequency and hours to potentially adding on-demand service allowing users to reserve rides. The public can also fill out an online survey to provide feedback. The board is expected to make its decision in October.
To be clear, we understand the importance of safe, reliable public transit. Cherriots provided 3.3 million rides in 2024, and according to surveys, 59% of those riders are taking the bus to work while 28% are riding 3-4 days per week. We recognize there is undeniable value in the service Cherriots provides.
However, we remain troubled by the prospect of this tax and the process by which it has been advanced. Residents here are already struggling to afford essentials under the stress of inflation. Taxing worker wages while forcing some companies to charge more for goods and services will only make a difficult situation worse.
Meanwhile, as AI and automation shape the future of public transit, Salem and Keizer should have the flexibility to consider new and more cost-effective options. For example, the city of Arlington, Texas recently celebrated the success of its Rideshare, Automation, and Payment Integration Demonstration (RAPID) pilot project testing on-demand autonomous vehicles.
Under Cherriots’ proposed tax, Salem and Keizer voters would be denied the opportunity to decide what’s best for them and their communities. We feel that is absolutely the wrong move. Our editorial board recently met with Cherriots CEO Allan Pollack and Board President Maria Hinojos Pressey, who told us they will continue listening to the public and that all options are still on the table. If that is true, we urge the board to strongly consider sending this proposed tax to a public vote, giving citizens an actual voice in the process.
Both the Chamber and Keizer City Council have already stated their opposition to this tax. We agree and sincerely hope the Cherriots board will reconsider their proposal. We must work together as a community to find better ways of supporting public transit without silencing voters and threatening our economic prosperity.
