School district votes against tax plan

The State College Area School District voted against participating in an amended version of a 1992 tax agreement between the University and other area governments Monday night.

The current agreement, established in 1992, will continue without the new changes.

Under the current agreement, the University provides services and about $1 million each year to the school district, county government, State College Borough, and Ferguson, Harris and Patton Townships in lieu of taxes.

College Township was previously included in the agreement, but pulled out and instead negotiated an impact fee on certain University events.

The new proposal would have prevented the University or any of the six parties from dropping out of the agreement until Dec. 31, 2016, the same date the University's separate agreement with College Township expires.

The school board's 8-1 vote against the proposal could prevent all of the other parties in the agreement from obtaining any of the benefits from the new proposal as the agreement required all six participating groups' approval.

The 20-year commitment was a major concern for school board member William Moyer, who voted against the proposal.

"I think 20 years is a long time to commit to anything," he said.

New tax laws are being created and reformed in Harrisburg, Moyer said, and if the school district agreed to the new policy they would not be allowed to collect a real estate tax on the University, as well as other types of taxes such as an amusement tax, for the entire 20 years.

"There was a real broad area of restriction," Moyer said.

Although the University will remain with the 1992 agreement, Dan Sieminski, director of finance and business for the University, said he does not know if the University will try to negotiate a new proposal.

"We negotiated fairly long and hard to get to the proposal that was rejected," Sieminski said.

The Centre County commissioners, Harris and Patton townships and the State College Borough approved the amendments to the 1992 plan. Ferguson Township has not yet voted on the plan. With the school board's rejection, however, the remaining township's approval would not be enough to enact the new proposal anyway.

"The county commissioners made it clear that they were disappointed," said Evan Smith, director of administrative services for Centre County Government.

"However, they realize that each of the elected bodies has to individually consider the proposed agreement," he said.

The 1992 agreement can continue for an indefinite amount of time, Smith said. The agreement gives the University the option to pull out of the agreement with an 18-month notice.

The State College Area School District serves all of the municipalities involved in the tax agreement.