‘Explore every avenue.’ Will State College find alternatives to proposed 35% tax hike?
AI-generated summary reviewed by our newsroom.
- State College council president addresses the proposed 8 mill tax hike for 2026.
- Officials will explore other revenue options to potentially reduce tax increase.
- Council will review proposed department budgets across several November-December sessions.
The State College borough council president addressed the hefty proposed tax increase recently presented to them during a meeting Monday evening, saying the council needs to be ready to “explore every avenue” to make sure the budget has a fair approach to taxes while preserving affordability.
Council President Evan Myers said he has received many comments on the budget since it was presented on Friday. The borough’s proposed 2026 budget includes an eight mill, or roughly 35%, tax increase to achieve a structurally balanced budget. If passed as is, that means a typical $300,000 (market value) home would see an increase in 2026 of about $410.26 ($34.19/month); a $400,000 home would see a $547.01 increase ($45.58/month), and a $500,000 home would see a $683.76 increase ($56.98/month).
As Borough Manager Tom Fountaine said last week, it is a “status quo” budget with no new positions added to it compared to the 2025 budget. The increases reflect inflation, employee wage increases and a 9.1% increase in group health insurance.
Myers said the borough staff gave the council a “well-thought-out budget” that adheres to the borough’s policy to have a structurally balanced budget, which can be a daunting task. It would be the first structurally balanced budget the borough has passed in years.
“The thing is, if we talk about affordability, we need to mean it. An eight mill increase on homeowners isn’t chump change. We can’t say we want affordability in all things, and especially housing, and then turn around with a large tax increase,” Myers said on Monday. “The borough administration recommends, but council makes the decisions on the hard choices. We need to take a hard look at what we’re doing, a closer look with affordability in mind.”
The borough provides many services to residents — tree trimming, leaf collection, snow plowing, trash collection, street repairs, human-related services, and financially supports CATA, to name a few — which all come at a cost.
“So how do we balance all that and square that with a large tax increase? I don’t have the answer, but all of us, collectively must. We owe it to our residents, and as we dive into this budget, we need to be ready to make changes to keep our services and also affordability. We need to find a way to have both. We need to explore every avenue and have a fair approach to taxes while we preserve affordability. Both are essential,” Myers said.
How else could the State College increase its revenue?
Other ways to increase revenue outside of raising taxes were discussed during the rest of Monday’s meeting, the first meeting after being presented with the proposed spending plan. The council reviewed the proposed budgets for parking and regional planning.
Although the borough increased parking fees as part of the 2025 budget, the revenue has decreased. Fountaine said while they increased the parking fees, they also started enforcing the two-hour parking limits, so there might be some decline from that. Borough staff has not been able to do an in-depth analysis on it, and could be a combination of several factors, he said.
Some council members tossed around the idea of raising revenue via neighborhood street parking fees on Penn State football game day weekends, which could help cover the costs of other things.
The council tried to implement a similar program in the Highlands neighborhood in 2020 but ended up not passing it because data showed it was not worth continuing the program, Fountaine said.
Still, some council members advocated for revisiting that and thinking of other ideas. Council member Matt Herndon said he agreed with the line of thinking with street parking fees, but said if they move forward with that, they should balance that with ensuring there’s still one free parking space per street. The two-hour parking limit is also worth investigating, he said.
“The way we work, we can’t charge a drink tax. We can’t charge a sales tax. When people come and visit our community, they don’t really pay into funding the services that we have. Street parking is kind of the only avenue we have to have them share their usage of our services. And so finding a way to do that, that brings in more revenue, but is not doing it in a way that’s harming the ability for people to find a spot at times, I think would be wonderful to hear,” Herndon said.
Fountaine said staff would look into the suggestions, although when the borough implemented the pilot program previously, it was a several month process, so it might not be done before the budget is passed.
The council will review the budget over the course of several meetings:
- Nov. 14: Review the budget for public works and enterprise funds
- Nov. 17: Review the budget for police and planning
- Nov. 25: Review the budget for administration
- Dec. 1: Public hearing and capital fund review
- Dec. 5: Wrap up
- Dec. 8: Wrap up
- Dec. 15: Adoption
