The Tax Was Already Coming
If a new payroll or income tax follows these negotiations, it will be tempting to connect the two. The City’s own records show they are on separate tracks — and that the tax started first.
It started in December 2024, to pay for buildings
At a December 16, 2024 work session, the Finance Director laid out the cost of a new police station and civic campus: roughly $200 million to build, and about $15 million a year in debt service — some 19% of the General Fund, against average annual General Fund revenue growth of about $4 million. His staff report put the question plainly: “The question now is, how will the City pay for the debt service?”
Councilors discussed a payroll tax that night. A local income tax was raised in the same discussion. Nothing in the staff report or the minutes mentions labor contracts.
The sequence
| When | What the City did |
|---|---|
| Dec 2024 | Payroll tax put on the table to pay for the buildings. Income tax raised the same night. |
| Feb 2025 | Council adopts guiding principles for evaluating new revenue. |
| Sept 2025 | The 2027-29 budget gap enters Council’s discussion. |
| Jan 2026 | Our first bargaining session. |
| Feb 2026 | Council narrows the options to three: a payroll tax, a personal income tax, and a general obligation bond. |
| June 2026 | Council chooses two — the payroll tax and the personal income tax. The bond is dropped. |
| Aug 2026 | Council finds every service-cut scenario unacceptable and directs staff to look for up to $2 million a year in savings. The Mayor asks for a timeline toward a decision on a new tax by November 16. |
| Sept 2026 | Impasse in our negotiations. The tax work continues unchanged. |
Thirteen months separate the start of the tax discussion from the start of our bargaining.
Where the $21.1 million a year goes
| Purpose | Per year |
|---|---|
| Debt service on the new buildings | $14.3 million |
| The General Fund operating gap | $4.05 million |
| Building lease costs | $2.0 million |
| Administering the new tax | $0.7 million |
Debt service and leases on the buildings come to $16.3 million — more than three-quarters of the total. The operating gap — the only piece a labor contract could affect — is $4.05 million, under a fifth. (Council work session, August 20, 2026.)
Do voters get a say?
Not automatically. From the minutes of the May 7, 2026 work session: “Staff confirmed that payroll or income taxes could be enacted by the Council via ordinance, but it was possible for voters to file a referendum to refer the decision to the voters.”
Of the three tools Council studied, only the general obligation bond required voter approval. That was the one dropped in June.
Resolution 2026-24 passed 6-2 on June 15, 2026, with Councilors Ellis and Shaffer voting no. Councilor Shaffer had recommended voter approval for whatever funding method was chosen as far back as December 2024, and said in June that he was troubled by the resolution’s final clause, which left the voter question open.
When would the money arrive?
Not before July 2027 — about a year into the contract now being bargained. City Manager Mark Shepard, in a message to all staff on August 25, 2026: “We know that a new revenue source won’t be available July 1, 2027.” The Finance Director has told Council implementation takes two or more years.
What this shows — and what it doesn’t
It shows sequence. The tax began in December 2024 to pay for buildings and has moved on its own schedule since. None of the resolutions governing it mention labor contracts. It is headed for a decision in November whether or not we have settled, and it cannot produce money before July 2027.
It doesn’t show that a tax is decided. Council has not voted on one, and has not decided whether to send it to voters. The November dates come from a request the Mayor made in August, not from a published agenda.
And it isn’t an argument about affordability. Whether the City can afford our contract is a separate question with its own evidence — the vacancy savings, the underspending, the reserves. That’s on Know the Facts. The two arguments are each stronger kept apart.
The bottom line
The City began pursuing new taxes to pay for buildings more than a year before it sat down with us. That decision is on its own schedule, and where we settle does not change it.
Every fact on this page comes from Corvallis City Council minutes, resolutions, staff reports and City communications, December 2024 through August 2026.