Salem lawmakers propose temporary ‘capital service’ funding to cover city’s public‑safety costs for state properties

House lawmakers representing Salem and civic leaders told the House Committee on Emergency Management, General Government, and Veterans on May 8 that the state should compensate the City of Salem for public‑safety services it provides to state‑owned buildings and land in the city.

"This bill is a straightforward concept to address a fundamental problem faced by the city of Salem," State Representative Tom Anderson said, introducing the proposal that supporters described as House Bill 2531. Anderson told lawmakers state properties make up about 8% of Salem’s taxable value and that a fair lost‑revenue calculation for services the city now provides is "approximately $7,000,000 per year."

The proposal discussed in the informational hearing would create a Salem capital service district or a short‑term funding mechanism to offset uncompensated police, fire, emergency medical and other public‑safety services the city provides to state facilities, including the State Capitol, the penitentiary and the state hospital. "The state needs to do more to help our capital city," State Representative Kevin Mannix said during testimony, urging the committee to consider both short‑term and longer‑term fixes.

Why it matters: City and business leaders characterized the funding gap as a direct strain on Salem’s public safety operations, which they said has worsened as in‑office state employment declined after the COVID‑19 pandemic. Tom Hoffert, chief executive officer of the Salem Area Chamber of Commerce, testified that city staff had identified a roughly $13,800,000 budget deficit and that state‑owned properties within the city are worth, by the city's estimate, about $1.65 billion and generate no property tax revenue for Salem.

Supporters framed the bill as a pilot or transitional measure. In committee testimony, Anderson and Mannix described a two‑year approach to give the Legislature time to craft a longer solution that could include sale or re‑use of certain state lands and buildings. "I would suggest it is a short term solution till we find a long term solution," Anderson said. Mannix added that converting unused state land into taxable uses could be part of the longer plan and noted a separate bill he sponsors to move certain state lands into local hands for development and future taxation.

Committee members asked whether a Salem‑only model would prompt other cities with large state holdings to seek similar compensation. "When we first started this bill, we looked at making it statewide, and then we reached the opinion and conclusion that Salem ... provides a different kind of services for it," Anderson said, arguing Salem's role as the state capital is unique. Other members noted examples of smaller cities and university towns where a large share of assessed value is tax‑exempt and said a statewide framework would require careful design.

Supporters offered details and concerns about public‑safety capacity: Hoffert said the Salem Fire Department is below national staffing standards and operates about "40% below the national standard for response times," and that at times only a single small firefighting company was available to respond to new incidents. Mannix cited comparative officer‑per‑1,000‑residents ratios used in his analysis and proposed specific investments that would expand patrols, canine and DUII enforcement and restore a downtown bicycle team.

Several legislators emphasized the bill would be part of a broader set of policy options, including returning state workers to offices, leasing or selling certain state buildings to private or residential users, and augmenting state police patrols around the Capitol. Committee members also referenced a similar model used in Olympia, Washington, as precedent for a capital‑area funding district.

No formal action was taken on the bill during the informational hearing. Supporters provided letters from Marion County commissioners and the City of Salem and urged the committee to consider temporary funding or legislative adjustments before the session ends. The committee closed the hearing with no motion and no vote recorded on House Bill 2531.

Questions and next steps: Committee members asked whether funding in the proposal would be ongoing or temporary; sponsors described it as a near‑term measure with the intent to pursue longer‑term, statewide or local solutions. Rep. Mannix said the measure could serve as a pilot and pointed to separate legislation aimed at selling surplus state land to create taxable property. The committee did not schedule a work session on HB 2531 during the hearing.