Should State College have an alcohol tax to offset the property tax burden? Candidates weigh in

In State College — where Manager Tom Fountaine has said two-thirds of crime in any given year is alcohol-related — residents want to know what ideas local candidates might consider to help offset the burden of property taxes in helping to fund the police department’s $11.1 million budget.

With the municipal primary election coming up on May 21, the Coalition of State College Neighborhood Associations sent out a survey to all eight Borough Council and seven county commissioner candidates, polling their opinions on alternative revenue sources.

“As the population increases and the tourist population increases, that expense is only going to increase and that comes out of all of our pockets, and our thought is that those who incur the services ought to pay for those,” Steve Smith, president of the College Heights Neighborhood Association, said.

Although Penn State’s University Park fall enrollment has remained pretty flat for the past six years — and even saw a 1.7 percent decrease last year — thousands of out-of-town guests visit the area each year for events like Nittany Lion football games, Arts Fest and 4th Fest. And by increasing the county’s hotel tax from 2.5 to 5 percent, the commissioners have said they hope to spur tourism and generate funds for additional conferences and events to attract more people to the area.

“If they have the success they would like, that will just increase the burden on the local police services,” Smith said. “None of that money is going to the local municipalities.”

The results of the survey show that while most Borough Council candidates favor an alternative revenue option — like a retail tax on alcohol or a hotel tax revenue-sharing formula, county commissioner candidates are less willing.

Out of the seven Borough Council candidates who responded, all but Penn State student Jackson Fitzgerald said they would support both of those options. Tom Dougherty, also a Penn State student, did not respond.

The candidates were all against or undecided about a local 0.5-1% sales tax, and had mixed opinions on a shift from a local earned income tax to a personal income tax.

In narrative responses to the survey questions, incumbent council member Jesse Barlow said he believes a retail tax on alcohol to be the best option, but would also support a local sales tax if that wasn’t an option.

“Unlike the alcohol and hotel taxes, it would not shift the burden to the many people who visit State College for football games and for special events,” Barlow said. “However, replacing the EIT with a personal income tax is probably a good idea even without the alcohol issue discussed above.”

Other hypothetical options suggested by borough candidates included an entertainment tax levied on paid sports and performances at the Bryce Jordan Center, raising the local earned income tax, and getting state support to offset the school property taxes.

Of the eight Centre County commissioner candidates, Chris Exachos, Mike Pipe and Pat Romano responded. While Romano was undecided on all options offered, Pipe was against the first three, and undecided on the fourth. Exarchos said he’d consider a hotel tax revenue-sharing formula and shift to a personal income tax, but was against an expanded local sales tax and undecided on an alcohol tax.

Pipe, an incumbent, encouraged residents to speak to state officials about the possibility of municipalities receiving a portion of the revenue if recreational marijuana were to be legalized and taxed in Pennsylvania — a move Auditor General Eugene DePasquale said would bring in $581 million per year.

Rush Township Supervisor Romano said he was against “rushing to taxation” for several reasons.

“First, all residents will be subjected to these taxes, which may not achieve the desired effect,” he said. “Second, the property taxes could still be raised which could be crippling to people — such as the elderly who survive on fixed incomes — added to the increased cost of living from the other taxes levied.”

In the case of most of the alternative revenue options suggested in the coalition’s survey, taxation authority from the state General Assembly would have to be granted. Borough administrators have also said that any tax like the alcohol tax would be best implemented on a countywide scale, as to not create a competitive disadvantage.

Some local lawmakers told the Centre Daily Times they’re open to giving residents the opportunity to decide for themselves what taxes they want to implement. However, Sen. Jake Corman, R-Benner Township, said the idea of a local alcohol tax is “wildly unpopular” in Harrisburg.

By issuing this survey, the neighborhood residents are hoping to send a message to borough and county candidates about the importance of the issue to them, Smith said, with the hope that they would pressure local legislators into getting more local tax options considered.

“I’m very encouraged the borough candidates are interested in addressing the issue, one way or another, “ he said.

State College Borough Council candidates

Centre County commissioner candidates

This story was originally published April 26, 2019 at 9:08 AM.