Springfield payroll tax moves forward amid proposed budget cut concerns

The Springfield City Council on Monday, April 6, advanced plans to introduce a payroll tax amid emerging concerns about possible future cuts to the city’s public library.

The council approved a three-year payroll tax rate of 0.1% applied to both employees and employers working in Springfield. It is expected to generate $2.45 million within its first year. A five-year budget forecast shared Monday shows a $804,000 shortfall for fiscal year 2027; with the payroll tax revenue applied, the forecast shows a surplus of about $426,000. 

City Finance Director Nathan Bell described the tax, which the mayor and councilors have discussed for months, as a way to diversify the city’s tax base and make it “more equitable.” 

He said more than 75% of Springfield’s workforce doesn’t live in the city, and therefore isn’t subject to property taxes, despite using city services like police and fire. Meanwhile, wages have increased faster than property taxes over the last decade, Bell said.

“It’s a tool that we want to implement not to necessarily increase the rate, but increase the tax base as we want to attract more businesses,” said Councilor Andrew Buck.

The tax will be established through a council-adopted ordinance, meaning it is only subject to a council vote, not a vote of the public. The first reading of the ordinance is scheduled for April 20, with the final one set for May 18. The earliest the payroll tax could take effect, if approved, is Jan. 1, 2027.

The ordinance restricts Springfield from increasing the tax or making structural changes for three years, and mandates that payroll tax revenues be budgeted in a separate fund and transferred into the general fund, as well as be subject to annual reporting.

The city rescheduled its public hearing on the payroll tax from Monday’s meeting to the one scheduled for April 20.

Councilor Michelle Webber said the business community supports the rate and thanked it for its input on the tax, though Mayor Sean VanGordon acknowledged that some community members are “very uncomfortable” with the proposal.

Nick and Libby Smith, the owners of Roberts Supply Co. on Main Street, wrote a letter to Springfield elected officials criticizing the tax that was included in Monday’s meeting materials. They urged councilors to instead trim city spending by “whatever means are necessary” to bridge Springfield’s budget gap.

“In the private sector, this is what we do when our budget runs short,” the owners wrote, adding: “Drastic times call for drastic measures, but you must look internally before imposing on the public.”

Even with payroll tax revenue factored in, city expenses are projected to outpace revenues beginning in fiscal year 2029, according to the five-year forecast. Councilors and the mayor emphasized that the payroll tax is not a fix for the city’s long-term budget challenges. 

In his presentation, Bell said the fiscal year 2027 budget also excludes potentially significant future costs, like deferred maintenance on city facilities and expenses associated with restructuring Eugene Springfield Fire. 

“In some ways it feels negligent in the fact that we don’t have [the deferred maintenance] in our budget,” Bell said. “We are struggling just to fund our daily operations, let alone save for anything in the future. And that’s not unique to us.”

Meanwhile, potential reductions in Springfield’s proposed fiscal year 2027 budget, which will be released April 20, are beginning to emerge publicly, like a $300,000 cut from the Springfield Public Library budget.

More than a dozen speakers decried the proposed library cuts — which could include the loss of two positions — during the meeting’s public comment period. Some said library staff are already receiving layoff notices, despite the city having not yet finalized, released or approved the proposed fiscal year 2027 budget.

“You say we need to wait until next month to discuss the budget, but you are already making budget decisions without us,” Springfield resident Ariel Sexton said.

Springfield City Manager Nancy Newton said there has been “some discussion around potential layoffs” but that it wasn’t appropriate to share details about the budget proposal — which will be subject to future discussion by the city’s budget committee and council — in a public meeting. 

“The key word on this is that this is a proposed budget,” she said. 

Council interviews candidates for Ward 4 seat 

Councilors also interviewed five residents who applied to represent Ward 4 on the council following the December resignation of Councilor Beth Blackwell. Ward 4 is bounded by 21st Street on the west, 42nd Street on the east, Highway 126 on the north and the southern city limits. A sixth applicant is Springfield Public Schools custodian Donald Sacrison.

The council will deliberate about which applicant to choose at its April 20 meeting. The city tentatively expects to swear in the appointee on April 27.

The interim councilor will serve through the end of 2026. In November, voters will elect a councilor to serve the remaining two years of Blackwell’s term, which ends Dec. 31, 2028, and the interim councilor is eligible to run in that race.

In addition to Sacrison, the applicants are:

• Callee Ackland, a tenant support specialist at the nonprofit Springfield Eugene Tenant Association and who serves on the Springfield Planning Commission
• Jill Cuadros, support services director at Eugene School District 4J
• Ben Larson, a farmer and a licensed educator at the Springfield School District, who serves on the Lane Regional Air Protection Agency Citizens Advisory Committee and on the board for the Upper Willamette Soil & Water Conservation District
• CJ Mann, who is retired from the Housing Authority and Community Services Agency (known as Homes for Good) and serves on the boards of Willamalane Park and Recreation District and Wildish Community Theater
• Thomas Luke McAllister, a financial adviser with Northwestern Mutual and owner of Valley Sims golf simulation facility who serves on the Willamalane Park Foundation board and Lane Transit District Budget Committee.