Support from Salem’s largest business group years ago helped make the local transit agency able to tax businesses without voter approval.
But Salem Area Chamber of Commerce leaders are now pushing back against Cherriots’ current efforts to tax payrolls. They say Cherriots executives aren’t upholding deals made seven years ago when the two groups signed off on a bill that authorized the transit agency to impose taxes starting in 2026.
Current and past chamber leaders say Cherriots hasn’t done enough to involve business leaders on its board or seek community input on its tax proposal, something transit leaders disputed.
Now, the relationship between the Chamber and Cherriots is publicly tense after the agency recently announced plans to impose a tax early next year without a public vote.
Frustration was clear at a July 31 Chamber forum where about 130 people gathered to share their anger, disappointment and opposition to the tax proposal.
Imposing the tax would require a Cherriots board vote, which is likely to come in October, General Manager Allan Pollock said.
If the tax takes effect as proposed, businesses inside the agency’s taxing district, which includes Salem and Keizer, would pay 0.7% of their payroll every quarter after Jan. 1, 2026.
Pollock said businesses would pay their first round of taxes in April 2026. At the proposed rate, the tax would raise $39 million in its first year to expand morning service, fund options for on-demand rides and build transit stations.
Old deals
Cherriots’ efforts to tax businesses for funding go back a decade.
In 2015, the agency sought voter approval for a 0.2% payroll tax to be paid by local employers.
It would have raised $5 million in revenue for Cherriots and brought back Saturday bus service. The community rejected it with nearly 60% of voters opposed, the Statesman Journal reported then.
Nick Williams, former chamber CEO, ran the group’s opposition campaign to Cherriots’ 2015 tax.
That led the late Senate President Peter Courtney, a Salem Democrat, to step in.
After the tax failed, Courtney asked Williams to come to the Legislature and weigh in on the new bill, he said.
Courtney brokered discussions between Cherriots and Chamber leaders, which Williams said started days after the election.
The veteran legislator’s goal was to increase community support for Cherriots to make way for funding changes and service improvements. He specifically wanted to improve the business community’s support of transit.
“It failed, it was a bloody, bloody battle in my community, it left deep, deep scars and I decided then that I would have to try to help do something about this,” Courtney said of the 2015 tax failure during a Senate floor speech in February 2018.
Negotiations lasted several years, culminating in a 2018 bill that initially drew support from Williams and Cherriots leaders.
The bill changed two parts of Cherriots’ operations, making the agency more similar to TriMet and other large transit districts. The first was a switch from an elected board to a governor-appointed board, and the second was the authority to impose a tax on businesses without voter approval.
IN KEIZER
The Keizer City Council will consider opposing a new payroll tax being proposed by Cherriots.
The issue: The Salem Area Mass Transit District wants to tax businesses to collect a tax on wages to fund Cherriots operations.
Council decision: Councilor Soraida Cross has proposed the Keizer City Council come out opposed to the tax. She is supported by Councilors Kyle Juran and Lore Christoperh
When: Council meets at 6 p.m. Monday, Aug. 18, at Keizer Event Center.
Public: The meeting is open. Citizens can make statements. The meeting is broadcast live on Keizer TV.
-Keizertimes staff
Under Williams’ leadership, the chamber supported a version of the bill with strict language requiring more business input on board appointments, he said.
He said there was talk of requiring a certain number of Cherriots board members to be from the business community.
“If Cherriots is gonna consider business-specific taxation, then you need to have some people that are part of that decision-making process that have skin in that game, that would be taxed themselves,” Williams said of the thinking.
No such requirement is in the version of the bill that passed.
The only requirement to appoint Cherriots directors is for the governor to get recommendations from “one or more local business and civic groups,” the bill reads.
Reviewing that version, Williams said it “has less teeth” compared to the language the chamber supported, which required multiple recommendations.
Although the bill passed in February 2018, Cherriots isn’t able to impose the tax until Jan. 1, 2026.
The date was decided by negotiations between legislators and business leaders, Pollock said.
The delay also allowed time for elected directors to finish their terms and for newly appointed directors to become familiar with Cherriots before deciding on the tax, according to Pollock.
Business involvement
Without strict requirements for business involvement in Cherriots set in law, the issue became one of informal agreement.
Chamber and Cherriots leaders differ on what was expected.
Former Gov. Kate Brown made her first appointments to the Cherriots board in May 2019: Sadie Carney, Ian Davidson, Chi Nguyen and Charles Richards. All were appointed to four-year terms.
Carney, a state worker in land conservation policy, and Davidson, who works for the Oregon Department of Transportation on bicycle and pedestrian programs, are both still on the board.
Nguyen at the time was executive director of the Asian Pacific American Network of Oregon and Richards was retired, according to previous Salem Reporter coverage.
The seven-member board currently has multiple business owners. Ramiro Navarro Jr. has consulting and automotive businesses and a child care organization in Keizer, according to state business records. Joaquín Lara Midkiff also runs a consulting business.
Navarro Jr. was appointed in 2021 and will serve his term until 2025. Lara Midkiff’s term ends in 2027.
Other current board members are Bill Holmstrom, a state employee; Joaquín Lara Midkiff, whose website says he works as a history fellow at Stanford University; Maria Hinojos Pressey, deputy director of farmworker union PCUN; and Sara Duncan, recycling coordinator for Mid-Valley Garbage and Recycling Association.
TJ Sullivan, president of the Salem Main Street Association, said at the July Chamber forum that he was one of the people who worked with Courtney on bringing business input to the agency.
“The agreement was that Cherriots would be reaching out to the chamber to find business people to be on your board to help prevent things like this from happening,” Sullivan said at the July 31 meeting.
Current Cherriots leadership say that was not an understanding passed onto them.
“I never heard of anything specifically like that we needed to have a member from the business community,” Hinojos Pressey, the board’s president, said. “I think the hope is just to have folks that are using the system and are really passionate about the transit system in Salem and Keizer regardless of what their, I guess, affinity is.”
Tom Hoffert, the chamber’s current CEO, said, although he was not in chamber leadership at the time, he was told there was an “agreement” between Cherriots and the chamber around including business perspectives on the transit board.
“Safe to say, it has been shared with me that the agreement changed and there has not been a business community voice on their board since the elected board members completed their terms and they transitioned to governor appointment,” Hoffert told Salem Reporter in an email.
Demonstrating need
Although not written into the bill, there was also a shared understanding between transit and business leaders that when Cherriots decided to impose a payroll tax, the district would need to show where it needed funding.
Robert Krebs, then-Cherriots board president, said the district understood it would also have to involve community input and feedback to workshop the tax before approving it.
“There was sort of a requirement that there was a need for the tax and they had to show the definite need and why it was required and what the public would get for it, and I believe they’re doing that,” Krebs said. “They needed to involve the community in the process too, which I think they’re doing since they’re talking to the chamber and other agencies around the city.”
Pollock and Hinojos Pressey said they both knew of that understanding and believe the district has proved it needs more funding through regular studies and surveys Cherriots conducts on its services.
The chamber has not shared a stance on Cherriots’ community outreach over the tax.
Former chamber leader Williams, however, said what he’s seen from Cherriots so far on this tax has differed from discussions in 2018.
“This outcome wasn’t projected to be as baked in as they’re now moving forward with,” he said. “The intent was for there to be a lot of … community outreach and discussion and Cherriots demonstrating their value proposition at a high level.”
In an emailed response to questions about the 2018 bill and proposed tax, Hoffert focused on the strain the tax would place on businesses if approved.
“Oregon is already the 48th most business unfriendly place to operate a company – efforts like this further remind business owners that their voice is not valued and has little consideration by the transit board,” he wrote, citing a 2024 ranking by CNBC.
The chamber’s board of directors will meet Aug. 20 to discuss the tax and decide their official position, according to Hoffert.
Before the Cherriots board votes on the tax, the district is welcoming public comment at meetings and open houses, which it will host a series of in September, Pollock said. Details have not been announced.
