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

State College School Board Approves Budget with No Real Estate Tax Increase

by on June 30, 2020 4:00 AM

The State College Area School Board on Monday approved a final 2020-21 budget that includes no real estate tax increase.

Marking the first time in 13 years the district has not increased taxes, the property tax rate will remain at 46.0875 mills. For the average homestead residential property with an assessed value of $81,513, taxes for the year will be $3,757.

Prior to COVID-19, the district was planning a 2 percent tax hike, but for the past three months has redeveloped the budget to have no increase because of the economic uncertainty resulting from the pandemic. 

The district's total budgeted revenue for the next year is $158,442,690, about $4.7 million less than 2019-20 and nearly $10 million less than had been projected prior to the pandemic.

Because of the pandemic's economic impacts, the budget anticipates a 10 percent decrease ($2.49 million) in earned income tax revenue and an $850,000 reduction in real estate transfer taxes, as well as a decrease in delinquent real estate tax collections. 

Local sources make up the vast majority of district revenues totaling 80 percent of the budget, or $126.65 million. Among local revenue, 80 percent comes from real estate taxes.

State funds will provide 19 percent ($30.6 million) of the district's revenue. Federal money accounts for 1 percent ($1.2 million).

In response to the revenue deficit, the district also reduced its planned expenses, which total $158,057,667 in the final budget.

Among expense reduction measures, the district secured voluntary salary and wage freezes for 2020-21 and will fill 30 percent of 30 open administrative and teaching positions.

The district is also deferring several expenses, including purchases of supplies, equipment and professional services, school bus purchases, and professional development and materials for curriculum work.

Rates for contracted transportation carriers are frozen and capital reserve fund transfers also are deferred.

Salaries and benefits comprise 74 percent of expenses at $116.77 million. Purchased services and supplies and equipment are another 12 percent ($18.6 million); referendum debt service and other debt service total 8 percent ($12.7 million); and payments to charter schools are 4 percent ($6.5 million).

Geoff Rushton is managing editor for Contact him at [email protected] or find him on Twitter at @geoffrushton.
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