Although students may not realize they are contributing to the tax bases of State College and four other municipalities, they are -- in the form of taxes on certain University items.

The University's municipal impact fee, which is added to the price of football tickets and other items purchased on campus, is used to pay for the services of surrounding municipalities.

Bill Mahon, the University's director of public information, said the fee is assessed for a broad range of things but usually includes those items classified as "not strictly educational."

A 1 percent fee is added to the cost of items at business-oriented units, and a flat fee is assessed to tickets costing more than $5.

A 50-cent fee is part of the $10 ticket cost of home football games. Tickets to other sporting events, such as men's and women's basketball, wrestling and men's and women's gymnastics, are assessed the same fee.

Emily Sullivan (freshman-secondary education) said she does not agree with the University's decision to tax football tickets.

"We pay for so many other things as it is. I don't think it should be charged onto the football tickets," she said.

The fee is also added to the ticket price of musical productions and art events on campus. Computers purchased through the University are also taxed.

University businesses such as the Penn State Bookstore on Campus, the HUB Eateries, the University Creamery and the Nittany Lion Inn are required to pay 1 percent of their gross revenues toward the in-lieu of real estate tax.

Student groups selling tickets costing more than $5 are required to charge a 50-cent impact fee.

Martin Grabias, treasurer of the Association of Residence Hall Students, said although his organization does not charge for its events, he predicted a 50-cent fee would discourage students from attending.

"It may affect the attendance," he said.

The University uses the funds generated by the surcharge to pay a fee instead of real estate taxes to the county. Because the University is exempt from paying real estate taxes, the surrounding municipalities looked for another way to generate the funds lost on real estate taxes.

Last February, the University settled out of court to pay about $600,000 a year for 10 years instead of paying real estate taxes. The University agreed to provide Centre County with $200,000 worth of services each year.

The money is paid at the end of each year, and the funds are distributed to the county, the State College Borough, the State College Area School District and College, Patton, Ferguson and Harris Townships. State College receives the largest portion of the money --about $300,000.

University officials agree that events on campus have an impact on the community. For instance, the money is used to provide police and other services available during home football games and other times throughout the year.

"There are all kinds of impacts on the community, most of which we think are positive," Mahon said.