Centre Region Municipalities Set Budgets, Tax Rates for 2023

It’s nearly the end of the year, and that means municipal governments are setting their budgets and tax rates for 2023. For the Centre Region, three municipalities will see no real estate tax increase, two will see increases and one will have a decrease.

Five of the six Centre Region municipalities have approved their budgets for 2023, with State College Borough Council set to adopt a final budget on Monday night.

Here’s a look at what each have planned.

College Township
Millage rate: 6.100
Change: None
Budget: $11.45 million

For the second consecutive year, College Township will have no property tax increase following incremental increases of .40 mills and .30 mills in 2020 and 2021, respectively. The 2023 budget has projected expenditures of $11.45 million and revenues of $9.7 million, with the remainder balanced by unreserved fund balance.

Township manager Adam Brumbaugh said the lack of a tax increase was largely due to the tax increases in 2020 and 2021, significantly reduced expenditures for those years, recovering economic conditions and federal aid — including more than $1 million in American Rescue Plan Act fund received over the course of 2021 and 2022.

The budget includes a return to the pre-pandemic level of 265 contracted police hours by the State College Police Department ($1.66 million), $3.19 million in capital projects, a 12.2% increase in Centre Region Council of Governments programs contributions ($1.46 million), payroll and benefits expenditures of $2.7 million with no full-time positions vacant, $500,900 for debt service and $1.85 million for IT, utilities, insurance and all other spending

Ferguson Township
Millage rate: 2.422
Change: None
Budget: $27.97 million

Ferguson Township has not had a tax increase since 2006 and that will continue in 2023, a streak that Township Manager Centrice Martin attributed in her budget message to a “thriving township” that “has relied on managed growth to fund spending levels.” Budgeted governmental expenditures for 2023 are $23.49 million, with revenues of $18.93 million and interfund transfers of $ 3.99 million.

Earned income tax revenue is expected to increase by more than $200,000 to a pre-pandemic level of $7.27 million, while property tax revenue is anticipated to be $1.5 million with an average 1% growth rate.

Martin wrote that key highlights of the 2023 budget are five new staffing positions, purchase of two police vehicles, implementation of four software services to improve operational efficiencies, construction of Suburban Park phase 1 and Cecil Irvin Park phase 2.1, construction of Park Hills drainageway improvements and stormwater and other infrastructure improvement projects.

Halfmoon Township
Millage rate: 7.37
Change: Decrease of 1 mill
Budget: $1.83 million

Halfmoon Township will decrease property taxes by 1 mill in 2023, which according to the budget will decrease tax bills by an average of $71.17, although savings can range from as low as $0.24 and as high as $312.00 depending upon assessed value. To achieve the tax decrease, the Board of Supervisors abolished the fire tax levy and opted instead to pay for contracted fire protection services and fire equipment contributions to the general fund. Initially the move increased payment for contracted services, but decreased equipment contributions, resulting in a total of $107,317 for the Port Matilda and Warriors Mark fire companies, a net decrease of $10,000 from 2022.

After public comment and discussion prior to adopting the budget on Dec. 8, supervisors agreed to commit an additional $25,000 in deficit spending funds to the fire departments and discussed releasing the $53,000 accrued in the fire protection fund from the tax levy to the two departments.

Supervisors committed deficit spending — or spending from unreserved fund balance before revenues come in — from the township’s $1.29 million fund balance for the Autumn Meadow Park loan ($280,134.45), the 2018 lease-to-own for a 2018 Western Star truck ($28,516.30), a 2022 Case 580SN backhoe ($134,360), and municipal building roof maintenance and repairs or replacement ($20,000). Supervisor Ron Servello noted that the budget also funds “quite a number” of road projects and building repairs that have been long neglected.

Harris Township
Millage rate: 3.80
Change: Increase of .3 mills
Budget: $4.25 million

Harris Township is increasing property taxes for the first time since 2017. Township Manager Amy Farkas wrote in a budget memo that the financial outlook for 2023 is “more stormy than it has been in years past” because of inflation and supply chain issues that have driven up project costs, along with steep increases in fuel and road salt. The township also began paying debt service on its new maintenance facility in 2022.

“In deciding to raise taxes, the Board noted that with record inflation, they can’t continue to pay for 2023 goods and services with 2017 dollars,” Farkas wrote in an email to township residents.

To help keep the tax increase down, the township unassigned $100,000 from the health insurance reserve fund and applied it to the general fund. Fire hydrant assessments, paid by properties within 780 feet of a hydrant, were doubled in response to escalating fees set by the State College Borough Water Authority and the $56,000 in costs incurred by the township moved out of the general fund

Projects planned for 2023 include the completion of the Rosslyn Road paving project, continuation of the Boalsburg Pike paving project, paving of South Church Street, replacement of the Mary Elizabeth Street culvert, a new pavilion and entry road paving for Fasick Park, installation of a fishing pier and pond management at Tussey Pond Park and completion of a project to install a new public parking lot behind the municipal building.

Patton Township
Millage: 9.50
Change: None
Budget: $16.4 million

Patton Township’s property tax rate remains unchanged again this year, having last increased in 2016. The budget is balanced with about $1.6 million in cash reserves. Township Manager Doug Erickson wrote that the the Draft Capital Improvements Plan anticipates no increase in the real estate tax rate 2024, then anticipates a 1%
increase for 2025 and 2026, followed by no increase in 2027.

Key projects for 2023 include phase 2A of Bernel Road Park, the addition of a police department K-9 unit, and use of state grant money to reconstruct and upgrade intersection of North Atherton and Woodycrest streets.

State College
Millage: 19.833
Change: Increase of 1.623 mills
Budget: $80.57 million

State College Borough Council is expected to adopt on Monday night a 2023 budget that includes the borough’s first real estate tax increase since 2019. For a property valued at $300,000 — the median value for single-family residential properties in the borough — the increase equals an additional $104 a year for properties without a homestead exclusion and $64 for properties with a homestead exclusion.

State College avoided tax increases for 2021 and 2022 in an effort to soften the financial impacts of the COVID-19 pandemic. But that has come at the cost of a structurally unbalanced budget requiring use of reserves to balance the general fund budget. The 2023 budget includes the use of $2 million in unreserved fund balance. Borough Manager Tom Fountaine said during a budget review in November that the use of reserves is meant to “smooth the increase in taxes that is required to continue to provide the service levels that have been historically provided by the borough through the general fund.”

A tax increase and use of fund balance is expected again in 2024 as inflation continues and to get the borough “caught back up and have a structurally balanced budget,” Fountaine said.

The budget includes $25.5 million in capital projects funded from prior years. Among those is a $6 million Calder Way improvement and infrastructure project between Fraser and McAllister streets funded by American Rescue Plan Act money. Other capital budget highlights include $5 million for a new parking structure to address a deficit of downtown parking spaces, with land acquisition possible in 2023. Another $3.5 million is designated for a surface lot on Nittany Avenue to replace the Allen Street lot that was sold as part of the still-pending State College Town Centre redevelopment project. A $1.1 million state grant funding also will be used for a shared-use path on Easterly and Westerly parkways and from Blue Course Drive to Whitehall Road and $250,000 will be used for Orchard Park bike path improvements.

Read more about State College’s 2023 budget here.