Centre County’s Board of Commissioners on Tuesday gave final approval to a 2026 budget that includes no real estate tax increase for the 16th consecutive year.
The $119,962,000 fiscal plan, which overall was unchanged from the tentative budget presented earlier in the month, maintains the county’s millage rate at 7.840. It includes an operating budget of $116.9 million, a 1% decrease from last year, and a $3.1 million capital budget.
Expenditures are an 11% decrease from 2025, largely due to a reduction in American Rescue Plan funds and the completion of the new Community Services Building in Bellefonte.
Personnel costs (41.2%), services (30.7%) and operations (13.2%) represent the largest expenditures by category. Human services (37%), public safety (21%) and judicial (17%) make up the largest budget expenditures by function.
The budget’s biggest cost drivers are a $12.6 million contribution to employee health insurance and retirement plan, a 7.7% increase, county finance director Richard Killian previously said.
“When you’re a people-oriented organization, like most local government units, the majority of our costs really do relate to personnel, and so those can be significant budget drivers,” Commissioner Amber Concepcion said on Tuesday. “But I think this budget that we’re taking action on today really represents a balanced approach to seeking to take care of our employees, take care of Centre County residents and provide for the community, and provide the services that we need to within some budget discipline.”
Revenues total $115 million, a 1% decrease. Grants (42.4%), real estate taxes (27.2%), charges for services (20.4%) and contributions and other revenue (8.3%) constitute most of the county’s revenue. While the millage rate remains flat, the budget projects a 2.2% growth in real estate tax revenue based on assessed values and tax-revenue trends.
The budget is balanced by $1.9 million in general fund reserves. The reserves will maintain a balance of 15% of operating expenditures, which is within the range recommended by the Government Finance Officers’ Association.
“I know we’re forecasting a $2 million deficit and we may end up with one, but generally they tend to be a little smaller than what we have forecasted because we’re pessimistic on the revenues and because everybody works hard throughout the year and we usually end up a tiny bit under our expense numbers as well,” Board Chair Mark Higgins said.
Commissioner Steve Dershem said the county has already received a $500,000 medication-assisted treatment grant that was not figured into the budget and will already reduce the deficit.
“We do have a slight structural deficit, but I think we are working our way every day toward minimizing that,” Dershem said. “And I think, again, historically, I think we’ve become very good at that.”
Over the last decade, projected budgets have often assumed a deficit, but only about one-third of the time did the county actually end up needing to use reserves to balance them, Killian previously said.
With much of the county budget dependent on state and federal funding, it was “a rather interesting budget season,” Killian said on Tuesday. While county staff began preparing the budget in the summer, they only had about a week and a half between when the state and federal budget deadlocks ended in November until a tentative budget was due to keep the process on time.
“We really do appreciate what the state’s been able to offer us and… it’s important that they know that their work is appreciated because a lot of what we do relies on the funding from the state and federal folks,” Dershem said. “And human services really would not be anything without them.”
Added Higgins, “We very much appreciate all the hard work, the partnerships with the nonprofit sectors that allow the county to very effectively and efficiently deliver human services to I believe it’s roughly 42,000 people annually, which is about a quarter of the population of the county.”
