With expiration on horizon for Eugene’s safety payroll tax, city starts talking about renewal

Eugene city leaders are laying the groundwork to decide the future of the Community Safety Payroll Tax, a dedicated revenue source powering dozens of positions across police, fire, court and shelter operations that is nearing expiration.

Since 2021, the Community Safety Payroll Tax has taxed local employers, employees and self-employed workers to fund services like police, fire and emergency response, the Municipal Court and prevention and homeless services. 

The tax will expire after Dec. 31, 2028, unless the Eugene City Council votes by June 30, 2027, to put the question of extending the tax before voters — and voters approve the extension. 

As Eugene approaches that deadline, an oversight body is reviewing the tax and its impact as required by ordinance. The city has also hired a marketing agency to drive awareness.

“The messaging for the future of this payroll tax is essential right now,” Britni D’Eliso, the program manager for the community safety payroll tax, told Lookout Eugene-Springfield.

The tax, which costs local employees an average of $254 per year, has generated about $100 million for community safety investments between 2021 and 2025, according to a presentation shared with the City Council on Monday, Sept. 28. 

In fiscal year 2025, the special revenue fund had roughly one-seventh the budgeted resources of Eugene’s $496 million general fund, according to city budget documents. It accounted for 3.69% of the city’s total budgeted resources across funds.

“We can see how this tax is extremely important for our city,” Council President Lyndsie Leech said Monday. “This level of prevention, activities and direct response in our community, if we didn’t have this, we know we wouldn’t be living in the same community as we are.”

More discussions over the tax will occur this fall, including a council meeting Oct. 14.

For now, here’s what you need to know:

What is the tax and how much do we pay?

The Community Safety Payroll Tax has three components: an employer tax on private businesses with a physical location in Eugene, an employee tax on people who work in Eugene and a self-employment tax.

The employee tax generates the largest share of revenue — about 70%. Private and public employees working in Eugene, including remote workers who live elsewhere, pay on average $254 per year, according to data shared Monday. 

Private businesses located in Eugene — which make up about 29% of revenue — pay an average of $1,300 per year and a median of $266.

Sole proprietors, partnerships and LLCs located in Eugene pay an average of $136 per year and a median of $38 per year. That group makes up just about 1% of the fund’s revenue. 

Where did the tax come from?

The Eugene City Council voted to introduce the tax in June 2019. 

The city needed a “sustainable, locally controlled” revenue source to address growing gaps in public safety services caused by years of stagnant growth and budget shortfalls, Assistant City Manager Kristie Hammitt told the council Monday.

“There were people that were calling the Police Department, and we were unable to respond,” Hammitt said. “Council took swift action to try to figure out what it was that we needed to do and how to go about doing that.”

The 2019 ordinance requires the city to use payroll tax revenue to “supplement, and not replace,” general funding for community safety. It established the city’s fiscal year 2018 funding level, before the council approved $8.6 million in temporary funding for public safety, as the baseline for that requirement.

Residents voted to cap the payroll tax rate and to limit what its revenues can be used for in November 2019. The tax went into effect in January 2021.

What does the tax fund?

The council will review services funded by the payroll tax and the results of those investments at its Oct. 14 meeting. 

The Community Safety Citizen Advisory Board, the nine-member oversight body created as part of the tax’s adoption, also releases annual reports that outline how the tax dollars are being spent.

Hammitt said the city has used the tax revenue to create more than 65 programs and services, and add 88 new positions to support community safety response. The investments have contributed to quicker response times and reduced recidivism, she said.

In fiscal year 2025, more than half of the fund’s spending went to police, primarily for personnel like patrol officers and leadership, 911 communications specialists, the street crimes unit, the downtown team and community service and housing support officers. 

The second-largest bucket was Central Services at nearly 22%, where the biggest line items were for jail bed contracts, Community Court and staffing within the Municipal Court and city prosecutor’s office. Fire and EMS came in third at nearly 16%, with a new fire engine serving west Eugene representing the largest single expense reported.

D’Eliso said losing the “visible, hands-on services” that the tax funds would be “noticeable” to residents.

“It is hard to fully convey the significance, but we’ve got a large amount of [full-time employees] that are funded by this,” D’Eliso said. “So positions, teams and services could potentially be removed altogether, or if they’re preserved, perhaps they would absorb general funds that would be taken.”

Potential future investments with the tax dollars include establishing a west Eugene police substation — a proposal Bethel neighborhood leaders have long advocated for and that Hammitt described as a “high priority” for many city councilors. 

A potential expansion of crisis response services might also be on the table. 

The agenda for Monday’s meeting stated that the city could expand its peer navigation program to “serve a broader geographic area.” Some advocates have called on the city to instead dedicate more tax dollars to a style of crisis response more similar to CAHOOTS, the nationally recognized mobile crisis service that ended in Eugene in April 2025. 

What are the next steps?

The Citizen Advisory Board will develop and deliver a final report on the tax — including how the city has spent the dollars and the tax’s impact on businesses — to City Manager Jenny Haruyama in January. 

Haruyama will then deliver the report to the council, which will hold a public hearing. The council will use the report and public testimony to decide by late June 2027 whether the tax should be placed on the ballot for renewal.

The city hired SME Consulting to assist with the payroll tax review process, including reaching out to tax preparers and businesses to gather input about the tax’s administration. 

The city is also contracting a marketing agency, Funk Levis & Associates, to develop a communications strategy to boost awareness of the tax’s impact in Eugene. The work will cost between $150,000 and $300,000, according to the request for proposals.

“We want to highlight the positive and what exists,” D’Eliso said. “But with that, supplementing that with, ‘And here’s the reality. You deserve to know what we’ve got before it’s gone.’”

Councilors Q&A

Councilor Alan Zelenka said the council should “probably consider” extending the tax without referring it to voters. That would require amending the ordinance, which involves a public hearing and council majority vote.

He said when the council first introduced the tax, he advocated to send it to voters instead of implementing it administratively.

“But since that time, I have seen what it does and the impact it has,” he said. “The size of the funding and the amount of services created by this would, if it went away, create an enormous hole in the public safety section of our services.”

He suggested closing what he described as a “huge loophole” — remote workers in Eugene and the employees who live in the city but commute elsewhere.

More than 17% of employees were working from home in 2024, up from 6.2% in 2019, according to census data shared Monday. Remote workers have to pay the tax only if their employer has a physical location in the city.

“Those people work in the city of Eugene, benefit from the services, but don’t pay anything,” he said.

The more than 31,000 workers who live in Eugene and commute elsewhere for work, per 2023 data, also don’t have to pay the tax.

“I agree with Councilor Zelenka that we can start to look at adjusting maybe how we administer this to account for some of that movement and how our job market has changed over time,” Leech said. 

Eugene Police Chief Chris Skinner said crime is trending downward in every major category except for assault and the department is seeing fewer calls for service. When asked by Councilor Matt Keating if he attributes the decline to investments due to the payroll tax, Skinner said it stems from a “variety of factors,” including the department being “very aggressive” in community engagement, crime prevention and street crimes.

“We have a very motivated and engaged patrol team right now,” Skinner said. “However, they’re down to 65. We normally run at about 85, and as Councilor [Randy] Groves mentioned, those 25 vacancies are police officer positions. We can only improve from here if we can get people hired.”

Councilor Eliza Kashinsky asked if the tax funding was enough to accomplish the goals of the tax, given inflation and rising costs.

Hammitt said with two years remaining before the tax sunsets, the city is thinking about how to continue investing the dollars it has and how it may need to adjust if there is a change in the tax.

“The short answer is yes, we could definitely use more funding, but I think we’re doing a lot with what we have and are very grateful for the community’s investment,” she said.