On Monday, January 26, the Salem City Council will consider a proposal to repeal a long-standing parking tax on downtown businesses and issue refunds for payments made since last summer. The shift comes as the city’s new paid on-street parking system, launched in July 2025, has proven to be a significantly higher revenue generator than initially anticipated.
A Surplus of Success
When Salem ended its era of free downtown street parking on July 10, 2025, city officials projected the program would bring in roughly $1.4 million in its first year. However, according to a staff report from Community Planning and Development Director Kristin Retherford, the program has already generated approximately $1.2 million in its first six months alone.
This financial windfall has created a “double-dipping” scenario that many local leaders are eager to correct. Before the meters were installed, downtown businesses were assessed a specific parking tax to help fund the district’s parking needs. That tax brought in $229,624 during the current cycle—an amount the city now intends to refund if the council moves forward with the repeal.
Avoiding the “Double Dip”
The logic behind the refund is simple: now that visitors are paying at the meter, taxing the businesses for the same service is no longer necessary. Mayor Julie Hoy and City Councilor Vanessa Nordyke, who is currently challenging Mayor Hoy in the upcoming May election, have been proponents of the refund.
In a recent mayoral debate hosted by the Salem Area Chamber of Commerce, Mayor Hoy noted that the council always intended to phase out the business assessment once the paid parking system proved its viability.
Community and Business Support
The proposal has received a warm reception from the Salem business community. Tom Hoffert, CEO of the Salem Area Chamber of Commerce, noted that chamber leaders had been advocating for this repeal since October. TJ Sullivan, president of the Salem Main Street Association, also voiced his support.
While the business tax might be ending, the revenue from the meters is already being earmarked for community improvements. A recent city survey of 2,300 residents highlighted clear priorities for the surplus funds:
- Enhanced downtown security
- Downtown events and promotions
- Physical improvements such as sidewalk cleaning, flower baskets, and alley sweeping.
Next Steps
While the council is expected to move the repeal forward during tonight’s meeting, a final decision will likely take place during a future session. If approved, eligible businesses can expect their refunds to be processed by June 30, 2026.
For Salem, the transition to paid parking (though initially controversial) appears to be providing the fiscal breathing room necessary to reinvest in the downtown core without placing an additional burden on small business owners.
Read the original article by Salem Reporter: https://www.salemreporter.com/2026/01/23/salem-city-councilors-to-consider-refunding-businesses-for-downtown-parking-tax/