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The Happiness Tax

by on July 05, 2016 6:00 AM

Living in Happy Valley is, by definition, a pleasant experience. Being a happy valley it would be rather untoward of Happy Valley if it were anything else.

As I rode my bike through campus this past Saturday afternoon it was a gorgeous summer day. Sunny, warm but not hot, and a nice breeze. The university was mostly vacant, and traveling through it at this time of year can give one a feeling of seclusion. And nothing says vacant quite like 500 acres of land -- which normally house and provide work and educational space for 50,000 people -- suddenly being occupied by only me and a few random souls.

Except, of course, when I pedaled past the Creamery there was the lengthy line of humanity stretching out the door and underneath the building overhang. We Happy Valley dwellers and our visitors certainly love us some ice cream. My guess is the parking lot at Meyer’s Dairy was similarly busy.

But after passing the Creamery, again, hardly a soul. I waited at the red light at Curtin Road and University Drive for what seemed minutes until a car arrived to trip the sensor in the asphalt. Pushing the walk button apparently has no effect on that signal on a summer Saturday.

Granted, as you read this campus was overtaken yesterday by 4thFest and next week will be again by the Central Pennsylvania Festival of the Arts. But this past Saturday afternoon peace and quiet reigned supreme.

The vacant space on campus and its feeling of isolation is not unique to Happy Valley. College campuses all around the country go quiet in the summer save for various athletic camps and limited summer semester students. From Bloomsburg to Athens, Eugene to New Haven, Ithaca to Austin, quads, dorms, libraries and classrooms are relatively silent.

The seclusion in Happy Valley just gets magnified because the population that leaves makes up a third or more of the total population of the local area. A rough equivalent would be if the entire population of Manhattan and the Bronx vacated New York City every summer. As good an idea as that may be, and for those on Fire Island and the Hamptons who are certain that it does in fact happen, we all know it doesn’t. But that’s exactly what happens here every year.

So we get out and enjoy it while we can. This borough and surrounding townships that sprung up as a result of the egalitarian purpose of education of the masses gave  rise to limited class divisions, a homogeneous population, and regular rankings among the best and safest places to live.

As with all great places to live there is, however, a financial cost associated with this pleasantness. In Happy Valley it’s a local income tax.

In my utopian country of taxation there would be three rules: the federal government can tax it when you make it, the state can tax it when you spend it, and the locals can tax the property you own. Double-dipping would not be allowed as it would indicate incompetence in government.

When we moved back to Pennsylvania (Bucks County) in 1999 the receipt of my first paycheck reminded me of the existence of a state income tax. As unhappy as I was to be reminded of this, I was able to rationalize it knowing that Pennsylvania has not only the largest full-time state legislature in the United States but also the costliest state legislature per capita in the country. I am effectively paying my dues for my duly elected representatives. If I am voting for them it seems fair that I should be paying for them, right?

Seven years later when we relocated to Happy Valley I was introduced to the happiness tax – the local income tax, something I had never encountered before. Depending on where you live in the State College Area School District it varies from 1.45 percent to 2.35 percent.

The reality is that anyplace desirable to live will have some form of a financial cost associated with living there, and a big part of that is higher taxes – almost solely property and income – along with any number of fees or annual assessments. The bigger and more desirable the place the higher the cost. Try living in the aforementioned New York City for a wonderful trip down happiness lane and the world of local taxation.

Locally it is not uncommon to place the blame for our happiness tax in the lap of our benevolent sovereign entity – Penn State. As an instrumentality of the state the University pays limited property taxes on its vast land and building holdings, and instead makes a small, in comparison to the projected tax liability, in-lieu-of payment to local governments. The university’s “impact fee” paid to the borough last year was $623,743. Its estimated assessed property value would result in about $3.8 million if subject to property taxes -- the general consensus being that our local income tax is making up for the property tax that Penn State is not paying.

Assuming the role of the 900-pound gorilla in the room, it’s easy to understand the school’s thinking that if not for it, there would be no here here, and rather than biting the hand that feeds us, we should instead find ways to profit off the masses it attracts. That’s not to mention the voluminous non-tangible opportunities it provides in the way of arts, athletics and entertainment, which gets back to the point that every desirable place has its own financially unique circumstances that allow it to sustain its business model.

With that in mind, I note the recent announcement of one very small additional financial cost associated with Happy Valley. Apparently the expenses related to the annual Blue-White Game, the Penn State football team’s spring scrimmage, are such that a heretofore unheard-of charge will be implemented for the 2017 Blue-White Game. “Fans arriving on game day for the 2017 Blue-White game who did not have a 2016 season car or RV parking permit will be charged $20 (cash only) for car parking in the Blue-White gameday car lots…”

As a season ticket and parking permit holder this charge doesn’t affect me – I’ll get a free parking pass with my season tickets. And even if I did pay it will be less than the $25 I paid to park in the same lots at the 4thFest yesterday. Certainly after all these years it’s worth it. And with the continued academic and on field success of the athletic department it makes sense and the cost of doing business is justified.

As the song says, “…just another brick in the wall.” In other words just one more Jackson to keep Happy Valley happy?


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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