Salem City Council voted unanimously Monday night to advance the repeal of the Downtown Parking District Tax, a long-running assessment paid by businesses in the downtown core to help fund parking-related services. City leaders said the change is now feasible because Salem’s paid on-street parking program is bringing in more revenue than projected, enough to support downtown services without requiring a separate business assessment.
The Jan. 26 vote moved Ordinance Bill No. 1-26 forward to a second reading and final vote at a future council meeting. If approved, Salem would complete a shift toward a “user-pays” approach where meter revenue supports downtown parking operations and related services, rather than an added charge on businesses.
City officials framed the move as a financial trade-off that benefits multiple parts of the budget at once: downtown businesses would stop paying the assessment (and may receive refunds), while the city’s General Fund would no longer need to subsidize certain downtown costs that can now be covered by meter revenue.
Meter revenue outpaces projections, changes district funding
Paid on-street parking launched in July 2025. Dana DeKlyen, assistant director of urban development, told council the program generated more than $1.1 million in its first six months. Staff said the revenue is being directed back into the downtown parking district to cover costs such as security and cleaning.
Councilor Mai Vang pointed to what she described as encouraging signs of downtown activity, referencing an estimate of more than 700,000 downtown visits based on city assumptions tied to the parking program’s early performance. She said the number suggests downtown is doing well, while noting there is still room to grow.
City Manager Krishna Namburi said the stronger parking revenue picture is also shifting how the city pays for services. He told council the General Fund previously supplemented downtown security costs by roughly $410,000 per year. With the paid on-street parking program generating dedicated revenue, he said the parking district fund will now cover that expense instead, easing pressure on broader city resources.
Councilors described the situation as an unusual “win-win”: the meter system is paying for itself, producing enough revenue to maintain district services, and creating capacity to remove an assessment that business owners have long criticized—especially after customers began paying at the meter.
Refunds, fairness questions, and what happens next
Supporters of the repeal said removing the business assessment is a direct way to reduce costs for downtown operators. Councilor Vanessa Nordyke said sunsetting the tax and refunding businesses that paid during the transition would ease the burden on local shops while also reducing strain on the General Fund.
The ordinance would repeal the Downtown Parking District Tax and authorize refunds for taxes paid since July 1, 2025. City staff said refunds would go only to businesses that actually paid into the assessment during that period, and that refunds would be issued by the end of the fiscal year. The city did not cite a typical dollar amount per business during the meeting, and the overall impact varies depending on how individual assessments were calculated.
Even with unanimous support to move the ordinance forward, council briefly debated how the refund approach intersects with other city compliance expectations. Councilor Irvin M. Brown raised concerns about fairness for businesses that were delinquent, contrasting the city’s willingness to penalize certain violations in other contexts with the idea of returning money during this transition. DeKlyen responded that refunds would be limited to what was actually paid.
Council President Linda Nishioka said she hopes the stronger revenue stream will support further improvements in downtown, including security, and potentially other upgrades connected to downtown parking facilities.
The ordinance now heads to a second reading and final vote. If adopted, Salem will officially end the Downtown Parking District Tax and rely on paid on-street parking revenue to fund core services in the district.