How is State College borough doing financially through the COVID-19 pandemic? Here’s what it said
The COVID-19 pandemic has directly cost the State College borough more than $2.3 million — conservatively — although the borough remains in “stable” financial condition for now, according to a Council presentation Monday night by the finance director.
The main direct impact has been parking-related, with $1.6 million in lost revenue from the parking decks and Parking Fund, another $600,000 in lost revenue from meters and fines, and an increase in related operating expenses by more than $100,000. Most of that is a result of the borough’s move to make such parking free during the pandemic, to support local businesses.
(On-street and surface lots remain free, and will likely continue to be free through December. The parking garages started charging again once Penn State’s fall semester started.)
“For now, the borough is stable,” Finance Director Dwight Miller said in a written statement Tuesday. “You’ve heard Council express a desire to refrain from tax increases at this time. The results for 2021 will depend on if Penn State continues to provide in-person learning and the ability to return to having special events and football. As you know, tourism is a very large component of the Centre Region’s economy.”
Miller, whose detailed report outlined finances through the third quarter, explained that three of the borough’s four primary funds — General, Sewer, Refuse — all boasted a slightly better bottom line than this point last year, with some reduced expenses off-setting reduced revenues. However, Miller added, those savings cannot be sustained indefinitely.
There are a few reasons for that. For one, some of the reduced operating expenses came from putting off projects and leaving vacancies unfilled. The fourth quarter could also potentially be a rough one, considering the lack of tourism from Penn State football. And, as Miller noted, it remains to be seen whether residents can catch up on their real estate taxes — revenue the borough was down by about $470,000 through September.
A brief overview of the four primary funds:
- General Fund: 2020 Year-To-Date revenue: $23,018,490 (last year: $32,750,042); 2020 Year-To-Date expenses: $17,461,834; (last year: $27,231,038). Note: The large year-to-year discrepancy here is due to a common accounting practice in listing $9.7M in 2019 debt as revenue and expenses.
- Parking Fund: 2020 Year-To-Date revenue: $1,320,664 (last year: $3,018,820); 2020 Year-To-Date expenses: $1,146,338 (last year: $1,390,613)
- Sewer Fund: 2020 Year-To-Date revenue: $3,589,324 (last year: $3,966,249); 2020 Year-To-Date expenses: $2,374,587 (last year: $3,227,473)
- Refuse Fund: 2020 Year-To-Date revenue: $3,790,317 (last year: $3,405,831); 2020 Year-To-Date expenses: $2,318,793 (last year: $2,200,155)
An 83-page “Financial Highlights” report from January to September can be found online and in the most recent borough council agenda packet.
Year-end projections will be provided to Council next month with the 2021 budget.
