Springfield City Council considering payroll tax, library levy 

The Springfield City Council asked staff Monday to explore a payroll tax and library levy as potential means to balance the city’s budget.

The council held an evening work session to discuss recommendations from a Fiscal Stability Task Force. One of the ideas is to cut library funding by $500,000 next year. Several residents attended the meeting with pink and yellow signs supporting the library.

The council directed city staff to do more research on how cuts to the library budget would affect hours and programs. Councilors also asked for more details on how a library levy could help the budget, as well as how the city might enact a payroll tax.

A library levy was not among the recommendations in the Fiscal Stability Task Force’s report but was suggested by multiple council members.

“I personally am not supportive of cutting hours from the library,” Councilor Kori Rodley said. “I think it’s one of the third spaces that we have in this town, one of the only ones that’s available for people to access computers.”

The council will now be on break until Sept. 2, but councilors said they will spend the summer reaching out to residents to get more feedback about the task force recommendations. They will reconvene in the fall for more work sessions. 

“We’re brainstorming here,” Mayor Sean VanGordon said. “This is not meant to hem us in at this point.”

While councilors agreed they wanted to further discuss a library levy, they also brought up concerns about compression, when property taxes reach caps set by statewide measures. A payroll tax would not be confined by those restrictions. 

“I don’t necessarily see us reaching our budget goals without it,” Councilor Beth Blackwell said of a payroll tax. 

The task force recommends the tax should be evenly split between employees and employers, with tax rates in the range of 0.1 to 0.2 percent. It also suggested guardrails to ensure the tax rate is not increased without review.

Task force work and recommendations 

VanGordon convened the task force of 12 Springfield community members, who met for nine weeks earlier this year to identify ways to address the city’s projected general fund operating deficit. 

The city passed its fiscal year 2026 budget two weeks ago. The fiscal year begins today, July 1. The city balanced the budget by eliminating a library tech position that is currently vacant, reducing fire station staffing during off-peak times, and cutting the fire department’s public information officer and two police department community service officer positions, among other changes.

In all, nearly $1.4 million was reduced from the general fund budget, which was left with a $50,000 shortfall. 

Budget forecasts, however, show a growing general fund deficit for future years: $3 million next year, growing to $6 million in four years. According to the task force report, the budget shortfall stems from decades of limited property tax revenue, as well as inflation and the end of federal COVID-19 relief funds. 

Consultants from Funk/Levis & Associates guided the work of the task force, and staff from ECOnorthwest provided research support. The task force reviewed public documents and data from government agencies to use in its discussions. 

According to the report, Springfield’s budget deficit has been building since the 1990s and is largely due to the decline in shared timber receipts and limited property taxes as a result of statewide Measures 5 and 50.

Before considering options to address the city’s fiscal challenges, the task force reviewed Springfield’s budget, as well as the broader trends affecting local government finance and how Springfield compares to other cities. Among the takeaways: Springfield’s general fund revenue was the smallest of the cities it analyzed (Eugene, Corvallis, Medford, Albany and Redmond), including three cities with smaller populations. Additionally, Springfield’s staffing level, on a per capita basis, was second-lowest among the group. The task force concluded that city operations are lean, compared to these other cities. 

The task force considered strategies other cities have implemented to address budget gaps, such as a payroll tax, utility fee, library levy, construction tax and others. The group looked at 56 potential solutions before reaching nine key recommendations:

For an immediate cost reduction/revenue increase:

• Reduce the library budget by $500,000.
• Implement a payroll tax.
• Increase current fire and police levies. 

To address long-term fiscal challenges:

• Review city-owned properties for sale or development.
• Examine the development of the Gateway employment area.
• Develop and implement a business retention and expansion strategy.
• Support efforts to reform Measures 5 and 50.

The task force also made two recommendations that would improve health and safety for the city but may or may not have a fiscal impact. These included implementing traffic cameras, with revenue benefiting public safety, as well as decreasing police overtime without reducing staffing or service levels. 

Community survey

In order to share the findings from the task force and elicit feedback from residents, the mayor plans to make presentations to groups such as the Chamber of Commerce and Springfield City Club. City councilors also discussed wanting to host community forums and do outreach at events.

The city is also encouraging residents to read the report and complete a survey.