As Salem Health leads the fight to kill a payroll tax for weekend bus service in and around Oregon’s capital city, it has the backing of the Salem Chamber of Commerce, which has argued that it puts the payment for transit service on the backs of small business.
Terry Horne, publisher of the Salem Statesman Journal, sits on the board of the chamber along with Dr. Cort Garrison, chief operating officer at Salem Hospital and West Valley Hospital.
Calling itself the positive voice for business, nowhere on the chamber’s website does it mention this issue, only mentioning that “The chamber works to make sure our infrastructure meets the transportation, safety, and service needs that support our region’s long-term economic vitality.”
But the weight of the levy was never to fall on small businesses -- the median employer in the Salem transit district would pay just $169, and even for an employer with an annual payroll of $500,000, the annual tax would be $1,050. If voters approve the ballot measure, the plan is to roll out Saturday service starting next summer and other improvements to follow.
Beyond a general antipathy toward paying taxes or supporting transit that is common among the Republican-leaning business group, opposition to the levy was led by Salem Health which despite a profit of $10.9 million, pays almost no taxes, because it is classified as a non-profit business. But since Salem Health is a large employer that must cover payroll taxes, it would be likely to contribute $600,000 to the payroll tax.
The Statesman-Journal ultimately did not allow its relationship with the Chamber of Commerce, nor its reliance on advertising from Salem Health to determine its opinion, arguing that "a flawed solution is better than no solution."
The editors called the absence of weekend service in the state capital "reprehensible" and the need "undeniable." Beyond the tri-county Portland metro area, Eugene, Bend, Corvallis, Albany, even Tillamook and Newport all have weekend bus service -- but not Salem.
A ballot measure awaits voters in November, proposed by the Salem-Keizer Transit District that would expand weekend and later evening transit service in the Salem-Keizer area, including holiday service. The tax would levy 0.21 percent of a business’ annual payroll (approximately 2 cents for every $10 of payroll), and would bring in approximately $5 million per year.
“We asked the community what kind of service they wanted to see. The Moving Forward system improvement plan reflects that feedback,” said General Manager Allan Pollock. “But, in order to implement phase two, additional revenue is required.”
Salem Health Opposition
An article appearing in The Lund Report last month indicated that Salem Health is putting up $50,000 to a conservative business political action committee that opposes the 0.21 percent tax on worker salaries and wages.
To add insult to injury, $50,000 is the same amount of money that the Salem-Keizer Transit District gave the hospital to hire a coordinator to improve non-emergency medical transportation for patients, who often have no means other than a private automobile to reach the hospital or other medical needs because of meager public transit service.
The $50,000 check Salem Health has written for the “Create Jobs PAC,” which was created by the Salem Chamber of Commerce, dwarfs all other money the organization has raised in the past year, although some other healthcare players have also hopped on board, including $500 from Salem Radiology Consultants and $250 from the self-interested Willamette Valley Transport, which offers rides to medical appointments for Oregon Health Plan members, who might be less inclined to use their service if public transit improved.
Donations in the low $1000s have been given by construction and real estate companies, which benefit from urban sprawl.
The transit districts in Portland and Eugene both have a payroll tax which employers, including PeaceHealth, Legacy and Providence pay into, and both are much higher than what Salem is proposing -- 0.7 percent for Lane County and 0.72 for Tri-Met in the Portland metro area.
Marcia Kelley, a Salem-Keizer Transit District member, said one reason Salem has struggled to provide any better service is that it has a disproportionately high number of people in need of paratransit services, such as wheelchair lifts. The American Disabilities Act requires transit districts that offer fixed route services to offer special transportation for people who are unable to easily use regular buses and trains during those same hours of operation.
Because the capital has a large number of state service agencies for people with disabilities, it has more than its share of people with special transportation needs. But because Salem doesn’t have fixed route service on Saturdays and Sundays, it doesn’t have to offer special transportation then either, leaving this group of people stuck at home from 9 p.m. on Friday till Monday morning, without their usual means to visit family, friends or go shopping for groceries or other errands.
Medicaid recipients do have transportation options for their medical needs, but the payroll tax levy would mean that both paratransit and regular bus service would be available on an expanded schedule.
Salem Health is the largest private employer in Salem, and reported net assets of $896.1 million in its latest filing, in addition to its $10.9 million in annual net revenue. Norm Gruber, the president and CEO of the company, had a total compensation exceeding more than $1 million a year -- $500,000 more than Salem Health would be expected to chip into the transit fund.
“We knew the hospital would not be happy because by state law the hospital would not be exempted,” Kelley told The Lund Report. “The hospital is a non-profit, they are not assessed property taxes to help with the infrastructure in the area.”
She said a property tax levy was considered but was unlikely to receive much community support. Caps placed on taxing districts by Measure 5 also would have severely limited the amount of money it could have generated.
The proponents of the transit levy, Yes for Cherriots, have raised just over $10,400, nearly all of that from the Oregon Transit Association, the nonprofit advocacy wing of the state's three largest transit agencies, including Salem-Keizer.
recent analysis by Act Now for a Health Oregon, which is affiliated with the Service Employees International Union, found that Salem Health was the second-most lucrative hospital system in Oregon in terms of its cash reserve. In other words, even if Salem Health went without any new payments for its services, it would be able to operate for 298 days on its reserves, second only to the Asante Health System in southern Oregon, which could go 370 days.
By contrast, Act Now calculated that Legacy could operate for 217 days off its reserves.
The Affordable Care Act produced a windfall in profit for Salem Health and other hospitals, eliminating almost all of the cost of treating people without insurance. Even by the standard of percentage of total charges -- inflated rates that no one actually pays -- Salem Health reported less than 2 percent spent on charity care at the last annual report in March. The story about Salem Health’s political move against public transit was first broken by the small, free Salem Weekly newspaper last Thursday.
An unnamed hospital public relations flak told the Salem Weekly that it couldn’t support the expanding bus service beyond business hours because it “will not improve access for Salem Hospital’s patients. … and funding community services that don’t directly impact patient care doesn’t mesh well with that requirement.”
Partially because of poor transit service in Salem, the hospital has increasingly encroached upon the neighborhood, razing buildings and felling century-old oak trees to make way for more and more parking lots to meet the needs of employees and visitors to the hospital. While Salem Health’s focus is set narrowly on its immediate profits, the upstream public health benefits of public transportation are well-known, through reduced air pollution from automobiles and fewer traffic accidents. Public transportation riders are also much more likely to be physically fit: a study cited by the Federal Transit Administration showed that men who commute on public transit are 45 percent less likely to be overweight or obese.
Salem Health declined to respond by press time.
Diane can be reached at [email protected]. Chris can be reached at [email protected].
