State College Borough Council Approves 2022 Budget with No Tax Increase

For the second consecutive year, State College residents will see no municipal tax rate increases.

Borough Council on Monday night unanimously approved a $65.9 million budget for 2022 that keeps the real estate tax rate at 18.26 mills. Earned income (1.3%), local services ($47) and realty transfer taxes (1.5%) also remain unchanged.

The budget includes revenues $55.4 million, with reserves and other governmental funds comprising the balance.

The general fund budget is structurally unbalanced, with expenditures of $32.5 million and revenue of $31.7 million. The $850,876 deficit is funded with general fund balance.

“Staff is recommending use of fund balance of $850,000 for the ’22 budget because we didn’t want to propose any tax increases and because the borough is in a pretty good financial position relative to fund balance,” Dwight Miller, borough finance director, said when the budget was introduced in October.

The general fund is projected to begin 2022 with a balance of $14.5 million and end the year with $13.7 million. The total projected balance at the end of 2022 for all funds is $40.4 million

Public works comprises 45% of expenditures, while the police department is the second highest expense at 17% of the budget.

The police department’s budget of $10,790,764 is a $649,025 decrease from 2021, but no positions or services have been cut. The decline is largely a result in decreased pension costs, Chief John Gardner said in presenting the proposed budget in November.

Across the borough’s two pension plans, State College will net a $1.8 million decrease in the minimum municipal obligation (MMO). The decrease will also result in a reduction of cost for contracted police services in College and Harris Townships

“Both pension plans did very well and the market increases have reduced the MMO,” Miller said.

The number of sworn officers will remain steady at 60, and the department plans to add a civilian social worker and communications specialist, bringing the civilian staff to 12.5 full-time positions. The borough anticipates a $75,000 state grant for the social worker position.

Melanie Morrison, secretary of police reform advocacy group the 3/20 Coalition, reiterated her organization’s call for the police budget to be reduced by $2 million, with the funds reallocated to mental health services. She also said that the school resource officer position for the State College Area School District should be eliminated and that the social worker position should not be under the police department umbrella.

“The point is to have social workers work alongside police not become them or be compromised by the police union, collective bargaining agreement or home rule charter,” Morrison said during a public hearing on Monday night. “They need to be a separate entity.”

The newly formed police community oversight board (COB), which is its own budget line item, has $125,000 in funding for 2022.

A new Department of Diversity, Equity and Inclusion, which was approved by borough council earlier this year, is budgeted for $544,603, but includes costs of the existing Office of Community Engagement, which is being folded into the new department.

The department will include a director, a support staff position and two existing community engagement positions.

In addition to the director of the new department coordinating the activities of the COB and working closely with the board chair, it will will collaborate with other departments and oversee diversity, equity and inclusion strategy and training, recruitment and retention of underrepresented populations and analysis of proposed legislation and policies for guidance on equity issues, as well as continuing to organize the borough’s myriad community engagement programs.

The budget’s 2022 capital projects are headlined by a long-discussed $6 million sewer and stormwater improvement project on Calder Way that will be funded from the borough’s American Rescue Plan Act allocation.

Here’s how the overall budget breaks down by fund: