For the 16th year in a row, Centre County’s proposed annual budget contains no real estate tax increase.
The Board of Commissioners on Tuesday reviewed and tentatively adopted the $119,962,000 fiscal plan for 2026, which maintains the countywide millage rate at 7.840.
“As most of the county’s costs to deliver services are increasing faster than the 1 to 2% of annual growth in county real estate tax revenue, [having no tax increase] does become more difficult every year,” Board Chair Mark Higgins said.
The proposed budget will be open for a 20-day public review period online and at the Willowbank Building (420 Holmes Street, Bellefonte) before a final vote is expected at the board’s Dec. 31 meeting.
The budget’s nearly $120 million in expenditures marks 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. It includes an operating budget of $116.9 million, a 1% decrease from last year, and a $3.1 million capital budget.
Human services (37%), public safety (21%) and judicial (17%) make up the largest budget expenditures by function, as is typical.
“These categories reflect not only local priorities but also the county’s role in delivering programs and fulfilling responsibilities established by the Commonwealth of Pennsylvania,” Richard Killian, director of finance, said.
Personnel costs (41.2%), services (30.7%) and operations (13.2%) represent the largest expenditures by category. The budget’s biggest cost drivers are a $12.6 million contribution to employee health insurance and retirement plan, a 7.7% increase, Killian said. Total personnel costs, including salary, taxes and benefits, are $48.2 million, a 5.2% increase, though Killian noted grants reimburse 40% of personnel costs.
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.
As 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, which is consistent with the average three-year growth, Killian said.
“Delivering $117 million in services with only $31 million in property tax revenue would not be possible without the generosity of the people and providers of Centre County,” Higgins said. “We also appreciate the hundreds of grants the county receives from state and federal resources providing roughly 40% of our funding.”
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.
Over the last decade, projected budgets have often assumed a deficit, but only 35% of the time did the county actually need to use reserves to balance them, Killian said.
Higgins added that when the county has experienced deficits, they “have been substantially smaller than the forecast.”
Commissioner Steve Dershem called the proposed budget “pretty lean for the most part,” but said he wants to use the next 20 days to examine ways to minimize the amount of reserves needed.
“Gven the structural deficit we have impacted here, I think we need to really look at it early and try to figure out ways we can save that money, because you can’t sustain structural deficit after structural deficit and keep your tax rate level,” Dershem said.
The commissioners credited Killian and the rest of the county’s staff and administration for developing the budget in the face of state and federal funding uncertainty.
“It was especially challenging pulling this budget together when the state budget was so incredibly late,” Commissioner Amber Concepcion said. “Not knowing what we were going to have to work with from the state added an extra level of challenge.”
