Furloughs, delayed projects: How will COVID-19 affect Centre County municipalities?
The coronavirus has created financial uncertainty for national, state and local officials, but many in Centre County are still trying to navigate the unknowns while preparing for budget deficits.
Centre County government officials and municipal boards have implemented cost-cutting measures over the past three months due to COVID-19. But with the start of fiscal year approaching, local leaders are anticipating even greater losses in revenue, with Penn State’s fall semester return as the biggest question mark for government officials, business owners and residents.
Centre County government
Pennsylvania provides the county with its largest operational source of funding, but due to the shutdown, the Independent Fiscal Office estimates revenues statewide will be $2.7-$3.9 billion short of expectations. According to the IFO, $1.5 billion of that impact could occur before the end of the fiscal year on June 30.
In preparation for significant financial loss, the board of commissioners voted 2-1 last month to approve cost-cutting measures that affected the jobs of 100 employees across 31 departments.
These changes will have saved Centre County $304,000 by the end of the week, according to county Administrator Margaret Gray.
Initially, the county furloughed 63 staff members, reduced the hours of 20 employees and left 17 vacant positions unfilled, but department heads have requested changes in the original cuts. As of this week, 30 full-time employees are furloughed, and 17 people are working reduced hours.
State College Borough
During Monday’s council meeting, State College Borough Manager Tom Fountaine said COVID-19 has posed difficulties for financial planning, but staff has adjusted expenses to account for revenue losses.
“Right now, it’s still really difficult in projecting with any accuracy. Due to the timing, we don’t know what’s going to happen with Penn State classes, for example,” he said. “So, as we work forward, we’re waiting for more information on those items.”
The borough has limited spending on nonessential items, including postponing development, capital projects and is keeping some positions vacant until further notice. But with the statewide shutdown, a decline in sales tax and the potential long-term closure of Penn State, the borough can’t yet project how much revenue will be lost.
With parking regulations and fees lifted in the borough since late-March, the parking fund has been impacted the most by the coronavirus. The borough has seen a $132,864 loss based on meters and fines, and the overall parking fund has experienced a $417,471 loss in revenue.
The general fund has seen a $156,011 impact as a result of the pandemic.
The overall financial impact of the pandemic on the State College Borough, based on data collected through April, amounts to more than $573,000, Finance Director Dwight Miller said.
Bellefonte Borough
Some Bellefonte Borough employees are expected to be affected by a loss of revenue, Borough Manager Ralph Stewart said Wednesday.
“In light of the situation, we are considering some short-term adjustments to payroll,” he said. “This would include not bringing back some seasonal workers, staggering work schedules, a short-term furlough plan and offering some early retirement options. I want to emphasize that our employees are highly valuable to us.”
Stewart said the borough does not know when or how many employees will be affected by the changes.
Some customers have contacted the borough to notify staff of their inability to pay utility bills due to unemployment, but utility services will not be terminated for the time being, Stewart said. The real estate tax period has also been extended to Sept. 30.
“As far as any changes to tax rates or utility fees, council is not planning to change anything at this time,” Stewart said. “We are adjusting the expense side to compensate for the anticipated losses.”
Ferguson Township
Eric Endresen, Ferguson Township director of finance, said the township is “anxiously waiting” to see how the coronavirus will affect local tax revenue in both the short- and medium-term, adding that more information will become available in the coming months.
“Penn State University is obviously the largest driver of the local economy, and their decisions will affect the entire region,” he said. “Ferguson is healthy financially, and we have cash reserves for this exact reason. The economy is cyclical, and we are in the downside at this time.”
With no current talk of layoffs, Endresen said the township is self-insured for unemployment, meaning that layoffs do not save as much money. As of now, Ferguson Township is not considering raising taxes for residents. Instead, Endresen said staff is considering deferring some capital spending and monitoring revenues and expenditures.
“A fair number of staff have been working remotely,” he said. “We are thankful that we have the infrastructure to do so. I’m sure that there will be some long-term changes in the way we do business as a result of the stay-at-home orders and the virus.”
Patton Township
Patton Township is expecting decreases in earned income tax revenue and local services tax revenue, Township Manager Douglas Erickson said.
“These are directly tied to employment levels,” he said. “At this time, we are planning for an overall decrease of around 10% in township revenues for 2020.”
All township employees are working full-time, and no staff members were laid off or furloughed. Residents will not see any changes in their tax rates or charges in 2020, Erickson said. At this time, the township is reducing capital project expenses in anticipation of reduced revenues. Some projects — street overlays, drainage improvements, equipment replacements — will be delayed for at least a year.
College Township
Based on data through April, College Township is projecting a 16-18% decrease in 2020 revenue, Township Manager Adam Brumbaugh said.
No township employees have been laid off, and Brumbaugh said it is too early to predict any increase in taxes.
Millheim Borough
The Millheim Borough has seen minimal financial impacts of COVID-19, councilman Robert Zeigler said. While some residents and businesses are behind in water and sewer bills, Millheim waived all late fees until the end of June, but affected parties must contact the borough for assistance.
Billing was suspended to the Millheim Soldiers and Sailors Memorial Park and the Millheim Pool since they will not open this summer, Zeigler said. In addition, borough council voted to delay any penalties regarding taxes at a local level.
No borough employees have been laid off or furloughed, and Zeigler does not anticipate an increase in taxes for borough residents. With a solar array being installed over the summer, he said the borough will start saving costs once the array is operational.
“If anything, this will offset some expenses we budgeted for this year, and if other things that the borough has going on fall in line, we may actually come out in pretty good shape,” he said.
Centre Hall Borough
Centre Hall Borough Treasurer Beth Araujo said they have not yet experienced the financial impact of COVID-19.
Araujo said staff have been working remotely and added that no layoffs or furloughs have occurred. As of now, the borough does not expect to raise taxes or increase expenses paid to the borough.
This story was originally published May 23, 2020 at 9:41 AM.
