Springfield payroll tax proposal advances toward public hearing, 2027 start date

A Springfield worker earning $50,000 a year would pay about $50 under the city’s proposed 0.1 percent payroll tax, and the employer would pay another $50 on that same wage. The Springfield City Council has advanced the plan toward a public hearing and first reading on April 20, the next step before any tax could move forward.

The proposal would not take effect immediately, even if approved. City ordinance materials say collections could not begin before January 1, 2027, and the revenue would go into a separate, identifiable fund with annual reporting to the council. The plan also bars any rate increase or structural change for the first three years after collection begins, with a comprehensive review set to start in fiscal year 2030.

The tax would apply to employers with a physical presence inside Springfield city limits and to employees working for employers located in Springfield. That means workers who commute into Springfield from elsewhere in Lane County would still owe the employee share, while Springfield residents who work outside the city would not pay it. The city has said the goal is to create a shared revenue stream that could help stabilize basic services over time.

Springfield staff have estimated the tax could generate about $2.45 million in its first year, close to the task force’s target of about $2.3 million a year. City documents say the idea grew out of Springfield’s 2024 budget message, when the city retained the Center for Public Service at Portland State University to study long-term fiscal pressure. That work led to a written report in June 2024 recommending that the city consider a payroll tax to reduce pressure on property tax revenue.

The ordinance says the mayor and council reviewed the report and the five-year forecast in fall 2024, then formed the Fiscal Stability Task Force. The group, made up of local business leaders, Chamber of Commerce leadership, labor representation and community volunteers, met from January through March 2025. The council later discussed payroll tax options on Sept. 2 and Oct. 27, 2025, held public hearings on Dec. 8, 2025, and March 2, 2026, and then advanced the measure again in the April 6 work session.

The broader budget picture helps explain the urgency. City materials describe Springfield’s general fund as squeezed by constrained property tax growth, inflation and rising service costs. Earlier task force work estimated an annual shortfall of about $4.5 million by 2027-28, while Springfield’s proposed fiscal year 2027 budget would cut two Springfield Library positions, including one librarian and one vacant manager post, effective July 1. The payroll tax is now one of the city’s clearest revenue options as it weighs new taxes against service cuts.