State College May Slash Tax Increase
By Adam Smeltz, The Centre Daily Times, State College, Pa., The Centre Daily Times, State College, Pa.
Dec. 29–State College Borough Council could soon slash its 2006 property tax increase by as much as 37 percent, thanks to state inaction on the emergency and municipal services tax.
Council members expected to lose about $400,000 in annual tax revenue next year if state legislators revamped the EMST legislation. A bill now lingering in the House of Representatives would extend an exemption to Pennsylvanians who make less than $12,000 a year.
The House adjourned this month without voting on the bill. But the State College council, working under the assumption that the bill would pass, voted Dec. 19 to raise property taxes by 2.735 mills to 10.035 mills in 2006.
About 1 mill of the increase was meant to cover the anticipated $400,000 shortfall from the EMST. At the time of the vote, Councilman Jeff Kern said the council would be willing to reconsider the size of the tax jump depending on the General Assembly’s action.
“I suspect we will be considering some form of adjustment in taxes,” Kern, a political independent, said Wednesday. He said he’d like to trim the increase by less than 1 mill — a move that would ease the burden on taxpayers while boosting the borough’s financial reserve to help cover higher retirement expenses and upcoming capital projects, Kern said.
He cited sewer and street replacements, a pedestrian light and a bicycle route as a few examples.
But council President Tom Daubert said he wouldn’t recommend rescinding any of the tax increase.
“We have so many things that we have to pay for in the next couple years, I’d leave it as is,” Daubert said. If the borough finds itself with a surplus, he said, it could reduce taxes later.
Daubert, a Republican, said that council members “never once discussed” reducing the tax increase as a group.
Councilwoman Elizabeth Goreham, a Democrat who voted against the tax increase Dec. 19, said she’s in favor of slicing away a full mill. Each mill levies $1 in tax on each $1,000 of a property’s assessed value.
“Now we have the highest property tax in the Centre Region, and that makes me uncomfortable,” Goreham said. “We want more people to move here and to buy houses. The higher the property tax, the more difficult that is to achieve.”
The tax replaced the occupational privilege tax at the beginning of 2005. Sanctioned by the state, it charges each person who works in the borough a $52 annual fee.
It is expected to generate close to $1 million in revenue for State College this year, up from the $170,000 brought in by the occupational privilege tax.
For now, state law exempts anyone from the tax who earns less than $5,000. Raising the minimum-income level to $12,000 would exclude hundreds of Penn State students who hold down short-term and part-time jobs in State College.
That puts the borough in an unusual position in the state, said state Sen. Jake Corman, R-Benner Township. He has long opposed the tax on the grounds that it amounts to taxation without representation, he said Wednesday.
“The idea of raising the minimum level is to help people with low incomes (escape) the tax,” Corman said. While it could put State College in a “unique” position, he said, “I think it makes sense for the statewide” population.
The measure to increase the minimum-income level has passed the Senate and is now sitting in the House. Neither state Rep. Lynn Herman, R-Philipsburg, nor state Rep. Kerry Benninghoff, R-College Township, could be reached for comment Wednesday.
Corman said he expects that the House will take up the EMST issue again in January. Daubert said he doubts that any changes made in 2006 could take effect before 2007.
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Adam Smeltz can be reached at 231-4631.
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Copyright (c) 2005, The Centre Daily Times, State College, Pa.
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