State College, PA - Centre County - Central Pennsylvania - Home of Penn State University

Like Penn State Does, Local Community Should Do What's in Its Own Best Interest

by on July 16, 2019 4:30 AM


This past week an estimated 100,000 visitors stopped in Happy Valley to see the Central Pennsylvania Festival of the Arts, the People’s Choice Festival and a number of other gatherings that are held in conjunction with “Arts Fest” week.

A few minor changes from previous years met these visitors: New regulations at Penn State went into effect on July 1 that drastically reduced the availability of places to park without a permit on nights and weekends and enacted 24/7 charges in the decks; and a higher hotel tax for those who stayed anywhere in the county.

The parking change is part of the continuing decline of the town-and-gown relationship locals have with Penn State, and the hotel tax is an excellent example of forward thinking instituted by our county commissioners. 

No other large university in this country is as intertwined with its local community as Penn State. With a student population of more than 40,000 and more than 17,000 faculty and staff in a local area with a population of 106,000, more than half the people living here are associated with the university.

For decades that intertwining has meant the university acknowledged its primary role in the town-and-gown relationship and allowed the locals to freely utilize some of its facilities. If you wanted to jog on the outdoor track or in the multi-sport building, you could. If you wanted to play pick-up basketball in Rec Hall, you could. If you wanted to attend an evening show on campus and park for free in an unused parking lot, you could. All of which contributed to the quality-of-life component of living in Happy Valley.

And since the university pays no property tax – and its property consumes quite a bit of land and buildings in the area – that benevolence with its facilities and space was always looked on as a small payback by townies.  

In fairness to the university it does make a payment in lieu of taxes to State College Borough for any property that is used for non-university purposes. But that payment is only about 17% of what the Borough would receive if it were paid property taxes. Meaning we still need a bit more of a payback.

Yet over the last decade the university has cut off townies from free access to those aforementioned facilities, and now has cut off free evening and weekend parking. So we’re not getting much money, and now we’re not getting our quality-of-life benefits.

Certainly you could say that Penn State has every right to restrict access to their facilities to those who pay for it. But in essence we in the community do pay for those facilities.

The borough, every local township, and the State College Area School District charge us local taxes which, at least in part, makes up for the lack of property tax revenue from Penn State. And that means more money out of our pockets — money that should be coming from Penn State.

Shouldn’t we get some small neighborly benefit from that expense? Access to facilities in times when they are lightly used would seem to be, and was for years, a very low-to-no-cost way for Penn State to pursue a positive town-and-gown relationship.

But as I said, this relationship is declining and unlikely to get better. And we can expect that Penn State, a multi-billion dollar corporation, will continue to do things that it claims are in its best interest. 

So what is a local community to do?

Exactly the same thing: Make decisions that are in our own best interest. 

Some might suggest a strategy that several towns and cities across the country have broached – aggressively pursuing larger payments in lieu of taxes. This can include threatening to get a university’s nonprofit status revoked so it would no longer be exempt from paying property taxes. Unfortunately it would likely not work with Penn State because Penn State is not a 501(c)(3) nonprofit organization. Penn State claims its exemption due to being an instrumentality of the state, not a charitable organization.

So what else? Well, why not use that which Penn State giveth?

Penn State brings tens of thousands of students to town every year and hundreds of thousands of visitors across multiple events and athletic contests. They have money and are, in many cases, very happy to spend it. All it takes is deciding where and how to get the money from them without also taking it from ourselves.

The hotel tax is a perfect example. Until recently Centre County had the second lowest hotel occupancy tax in the commonwealth. The county increased it, as of April 1, to the maximum allowed by the state. The expectation is this increase will generate millions of dollars a year. But it is still the second lowest overall hotel tax rate among Big Ten communities.

Happy Valley should have a hotel tax rate consistent with the top Big Ten institutions. Our state legislators should help us out and allow the county to increase this tax so it will generate millions more dollars that can then be directed to various civic facility needs – such as school district athletic facilities, or parks and recreation facilities. Those attractions would then be used to draw even more visitors to the Centre Region.

And what about all the rentals in the community? In State College the majority of indoor and outdoor crimes occur in and around rental properties. Shouldn’t renters pay their fair share of the cost of local police services since they’re using those services more than owners? There are at least 35,000 renters in the Centre Region. The borough expects to spend a little over $11 million on police services this year. Ferguson Township $2.4 million. Patton Township $3.2 million. A renter fee of $25 a month added to each person’s lease would generate $10.5 million a year in revenue, cover rental properties’ share of police expenses, and either free up civic money to be spent on more quality-of-life benefits for the community, or better yet, lower our local income tax.

Penn State has shown they are moving away from the good-neighbor policies of years past and focusing on what they claim is in their best interest. We, the residents of Happy Valley, need to act similarly. That means finding ways to increase revenue from the people Penn State brings in and at the same time refining our quality-of-life by improving local facilities and lowering our local income tax.

Don’t we residents of Happy Valley deserve that? Of course we do! All it takes is a little more forward thinking.


John Hook is the president of The Hook Group, a local management consulting firm, and active in several nonprofit organizations. Previously John spent 25 years in executive, management and marketing positions with regional and national firms. John lives in Ferguson Township with his wife Jackie and their two children.
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