Centre County will be raising taxes for the first time in eight years in the aftermath of the state budget impasse and the approved contentious spending bill, Centre County Board of Commissioners Chairman Jon Eich said.
While the county knows it'll be raising the local real estate tax -- the only tax the county has the power to levy -- the amount of the increase is in question, he said.
"Centre County government has not increased taxes for eight years," he said. "We, unfortunately, will not make a ninth."
Despite the long wait and new tax, cash from the state is now flowing to the county. The end to the budget impasse Oct. 9 -- which left Centre County waiting for 100 days, forcing it to tap into its reserves and establish a line of credit -- means the commissioners won't have to dig into county coffers any longer. The county used $4 million of its $14 million in reserves during the impasse.
"Within the last week, we have received $5 [million] to $5.5 million of funds for programs we do operate," Eich said. "This means it will no longer be necessary to tap into that $15 million line of credit we established."
But local legislators are indignant the county had to ask for credit to begin with. To state Rep. Kerry Benninghoff, R-Centre, this year's budget was a disappointment on many levels.
"I just think some of the priorities and spending were off the mark," Benninghoff said.
For example, millions of state dollars are going to fund things like a new soccer field in southeastern Pennsylvania and the construction of the Pittsburgh Penguins' new arena, he said. At a time when the state is forced to cut library and hospital funding and education grants to children, Benninghoff said the state is sending mixed messages.
Centre County receives about two-thirds of its money from the state, which partially or fully funds certain programs the county offers, Eich said.
"There are going to be some cuts to programs, but somewhat surprisingly, there are also some increases," he said.
The county now has a general idea how funding to programs will change, but there are several options left in making reductions, Eich said. He's hoping the state will absorb some of the cuts itself, but there is the possibility some of the costs will be passed down to Centre County.
"In general, it is going to be a very tight budget year for the county and counties overall as we go forward," Eich said. "And what is worse yet, we don't know what the next state budget will look like, because legislators have used all the state's reserved funds to keep the budget as close to last year as possible."
This sounds the alarm for future budgets. Lost state revenue this year was offset by federal stimulus funding and state surpluses, Eich said, and those sources won't be there next year.
"We continue to hope that the overall plan set in place by the Obama administration will take hold and turn the economy around," said Tor Michaels, chief of staff for state Rep. Scott Conklin, D-Centre. "But Commissioner Eich is right in saying next year will be a tough year if we don't see some sort of recovery taking place."
