Centre County, Penn State finalize 20-year tax agreement. Here’s what to know

A long-awaited agreement between Centre County and Penn State that’s taken years to plan has finally come to fruition.

A “payment in lieu of taxes” (PILOT) agreement was unanimously approved by the Centre County commissioners Tuesday, and it will see Penn State provide the county with a combination of a complex financial contribution and in-kind services in exchange for not having to pay regular property taxes.

Penn State is exempt from property taxes due to its status as a nonprofit educational institution. It’s common for institutions like Penn State to arrange voluntary PILOT agreements like these with county governments and municipalities to make up for missing tax revenue.

The 20-year-long agreement, which Commissioner Mark Higgins said had taken “multiple years of work” to complete, was originally supposed to be approved at the end of 2024 when the previous agreement ended. But a 180-day extension was granted to allow for some remaining negotiations to be finalized.

“This was a very detailed project, but we’re strong partners with Penn State, and we appreciate all of the work we’ve done back and forth,” Higgins said. “I know [the county] is a little older than they are, but it’s still been a great relationship since 1855.”

County Administrator John Franek added to Higgins’ statement, sharing that the terms of the new agreement “reflect the positive relationship that Centre County has with the university.” He also shared in an email to the CDT Tuesday afternoon that it “builds upon the previous agreement,” and “is based upon measured impacts to county-provided services.”

The complex agreement doesn’t simply involve an exchange of money between the two, so Franek said it was difficult to estimate the agreement’s overall worth. The majority of what the county will receive in the deal includes a wide variety of in-kind services, such as the continued sale of used vehicles, professional and consulting services, continuing education and professional development programs for county personnel, and use of certain university (non-athletic) facilities.

Regardless of the amount though, the financial contribution will be subject to an inflation area adjustment every two years.

While the university’s agreement with the county has now been finalized, Franek confirmed in his email that Penn State would have to come to separate-yet-similar agreements with the two municipalities it sits in, State College Borough and College Township.

More details on those agreements could be shared at future borough and township meetings, which are held at 7 p.m. on the first and third Mondays of the month, and at 7 p.m. on the first and third Thursdays of the month, respectively.