The State College Borough proposed a significant property tax increase Monday as a part of its 2026 budget plan, its first structurally balanced budget in five years. The plan calls for an 8-mill increase, raising the borough’s total property tax rate to 30.88 mills, about a 35% jump from the current rate.
"Over the past four years, the Borough has adopted a structurally unbalanced budget, first as part of the COVID recovery, and later due to large, unrestricted fund balances," said Borough Manager Thomas Fountaine in the budget proposal. "The unrestricted fund balance was due to the onetime American Rescue Plan Act of 2021 (ARPA) grant funds received by the Borough during 2021-2022."
Fountaine also noted critical infrastructure projects that are now underway, including Calder Way improvements, and that are on the horizon, including replacement of the Pugh Street Parking Garage.
Borough officials say recurring revenues have not kept pace with rising costs, including employee salaries and health insurance.
Nearly 45% of all property in the Borough is tax-exempt, limiting the tax base and making property taxes the primary tool available to fund current levels of service.
The public budget hearing drew strong push back from residents who say the increase is too steep and could make living in State College less affordable.
Mark Husick, State College Borough homeowner and the president of the Highlands Civic Association, said many households are already struggling with higher food, utility and day-to-day costs.
“Unfortunately, many of the renters and homeowners within our community could be forced to move out of the Borough in search of lower housing costs just due to this tax increase,” Husick said.
Resident Jeff Martin, a member of the Home Foundation Board, criticized the proposal as unfair to working families.
“Thirty-six percent is too much. We're just working-class people… I want us all to pay our fair share.” he said.
State College homeowner Nathan Remick told the Council that taxes have risen “staggeringly” since he bought his home in 2008, and warned the increase could hit State College’s most vulnerable residents the hardest.
“It's those that are less fortunate than us in this room that are really gonna hurt, be hurt most by this.” Remick said.
The Borough’s budget proposal does not specify what changes might occur if the tax increase is not approved.
The Borough Council will continue discussions as the budget process moves forward, including at a work session Friday at noon that includes a time for public comment. A vote on the final 2026 budget is expected at the council's Dec. 15 meeting.