Updated Nov. 26 with correction to garage parking fees.
State College’s proposed 2025 budget includes increases to the borough’s real estate tax, sewer fees and, for the first time in more than a decade, public parking rates.
The $77 million proposed budget’s 3-mil property tax increase would bring the borough’s millage rate, which is the highest among Centre County’s 35 municipalities, to 22.880. The planned increase comes as State College works toward achieving in the next three years a balanced budget that does not rely on one-time funds to cover recurring expenses.
Two mils of the increase would go to the general fund, generating $1.16 million in new revenue, and 1 mil would generate an additional $582,185 for the capital fund, according to an overview presented to Borough Council earlier this month.
For a residential property with a $300,000 market value and no homestead exclusion, the annual real estate tax increase would be $159.29, or $13.27 a month. With the homestead exclusion, the increase would be $84.29 annually, or $7.02 monthly.
A $400,000 market value property with no homestead exclusion would have an increase of $212.39 annually / $17.70 monthly, and with the exclusion it would be $137.39 / $11.45. For a property with a $500,000 value, the increase is $265.49 annually / $22.12 monthly without the exclusion or $190.49 / $15.87 with.
The average market value for single-family homes in the borough is $384,946.
The borough’s proposed budget is, for the third consecutive year, structurally unbalanced, with projected general fund expenditures of $40,574,496 and recurring revenues of $38,144,587. It will use $2,429,909 from reserves to cover the gap.
The proposed budget projects a year-end general fund balance of $13,666,353
State College did not have a tax increase for three of the past four years as administrators and elected officials sought to lessen the financial impacts of COVID-19 on residents and because of large, unrestricted fund balances from COVID relief money. But long-term projections for pensions and capital projects, along with the borough’s own policy, will require a structurally balanced budget in the next several years.
“The borough will plan to achieve a structurally balanced general fund budget by 2027 using both real estate tax increases and other revenue,” Borough Manager Tom Fountaine said at a Nov. 12 council work session, adding that he expects tax increases in 2026 and 2027 as well.
Fountaine wrote in a letter introducing the proposed budget to council that “many capital projects and purchases have been delayed until 2026 or later,” because of the budget is structurally unbalanced and dwindling unrestricted fund balance.
“This is a very status quo budget,” Fountaine said. “There is nothing substantially new or different proposed in this budget.”
The budget’s overall $77,767,356 in expenditures from all funds are $8.1 million less than in 2024.
The “major cost driver” in the proposed budget is employee benefits, which will include a a 19.4% increase in group health insurance. The borough had a 10% health insurance increase in 2024.
Significant capital improvement project — which are funded by grants and other existing committed funds — include $3.2 million for phase two of the Calder Way project, $2.4 million for the High Point Action Sports Park, $2.3 million for street reconstruction and $2.2 million for street resurfacing, as well as a new multimodal path along Easterly/Westerly Parkway from University Drive to Blue Course Drive, improvements to the Orchard Park bike path and a pedestrian bridge at Walnut Springs Park.
On the revenue side, $22.16 million in taxes represent about a third of all revenues and 58% or general fund revenues. Real estate taxes make up the largest of those at. a projected $12.6 million.
Finance Director Dwight Miller said he projects a downward trend in realty transfer tax revenue to continue with a slowdown in the sale of large properties, as well as a small decrease in local services tax revenue. Earned income tax revenues are projected to see a small increase.
PARKING FEES
Increases to fees for street, lot and garage parking are proposed for the first time since 2014, Parking Director Tom Brown said at a Nov. 18 work session.
Fee schedules, including for parking, are scheduled to be discussed at Borough Council’s Dec. 2 meeting.
Here’s a look at the current rates and proposed changes.
Street Meters
| Type | 2024 | 2025 (proposed) |
| 15 min, 30 min & 2 hr spaces | $0.25 per 12 minutes | $0.25 per 10 minutes |
| 5 hr spaces | $0.25 per 30 minutes | $0.75 per 30 minutes |
Metered Parking Facilities (Beaver Ave. Lot, McAllister Deck)
| Type | 2024 | 2025 (proposed) |
| Regular | $0.50 per 24 min | $0.50 per 20 min |
| Special Event | $2.25/hr | $3/hr |
Garage Parking
| Type | 2024 | 2025 (proposed) |
| 6 a.m.-6 p.m. | 1st 30 min – Free 30-60 min – $1 After 1 hr – $1/hr | 1st 30 min – Free 30-60 min – $1 After 1 hr – $1/hr |
| 6 p.m.-6 a.m. | 1st 30 min – Free 30-90 min – $0.75 After 90 min – $0.75/hr | 1st 30 min – Free 30-60 min – $1 After 1 hr – $1/hr |
| Max Daily | $18 | $22 |
| Special Event Rate | $2.25/hr | $3/hr |
| Special Event Max Daily | $32 | A$50 |
A previous version of this story incorrectly reported 2025 proposed garage hourly fees for 6 a.m. to 6 p.m. The corrected proposed rates now appear above.
On-Street Permits
| Type | 2024 | 2025 (proposed) |
| R | $10/yr | $10/yr |
| R1 | $10/yr | $10/yr |
| Commuter | $45/mo | $50/mo |
Off-street Permits
| Type | 2024 | 2025 (proposed) |
| Beaver Ave. Garage | $100/mo for 24 hr parking | $115/mo for 24-hr parking |
| Beaver Ave. Garage – Commuter Only | $85/mo | $90/mo |
| Fraser St. Garage | $115/mo for 24 hr parking | $130/mo for 24 hr parking |
| Fraser St. Garage – Commuter Only | $85/mo | $90/mo |
| Sparks Street Lot | $75/mo | $85/mo |
| McAllister Street Deck – 2nd floor | $100/mo | $115/mo |
| McAllister Street Deck – Roof | $85/mo | $100/mo |
| Pugh St. Garage | $115/mo for 24 hr parking | $130/mo for 24 hr parking |
| Pugh St. Garage – Commuter Only | $100/mo | $105/mo |
| Barnard St. Lot | $75/mo | $85/mo |
SEWER FEES
Proposed residential sewer fees for 2025 are $13.56 per 1,000 gallons per quarter, up from $12.67 in 2024. The minimum quarterly charge is $40.68, up from $38.01.
Fountaine previously said that sewer rate increases are a result of the University Area Joint Authority raising the borough’s fee for sewage treatment and disposal. State College and UAJA have been embroiled in a dispute for more than two years over how the borough is billed and recently reached an interim agreement as they work toward a final resolution.
Like parking fees, sewer fees will be discussed at Borough Council’s Dec. 2 meeting.
BUDGET TIMELINE
State College Borough Council has held three budget work sessions so far. The upcoming schedule includes:
• Dec. 2, 7 p.m. — Public hearing, capital fund and fee schedule discussion
• Dec. 9, 7 p.m. — Wrap-up discussion
• Dec. 16, 7 p.m. — Budget adoption
