Centre County’s proposed 2025 budget includes no real estate tax increase for the 15th year in a row.
The Board of Commissioners on Tuesday adopted a tentative $118.5 million operating budget that keeps the county’s real estate millage rate at 7.84.
The proposed budget will be open for a 20-day public review period online and at the Willowbank Building (420 Holmes Street, Bellefonte) before a final vote is expected at the board’s Dec. 31 meeting.
Commissioner Amber Concepcion said that at the recent County Commissioners Association of Pennsylvania fall convention she heard from a number of counties that are planning tax increases of 10% to more than 30%, or sizable operating deficits.
“We’re really fortunate to have a community with an even gradually growing tax base that has allowed us to not have to raise taxes, because while it was gradual, we have growth in revenues, not falls, which is what other counties are experiencing,” Concepcion said.
Centre County’s 2025 budget reflects a 1.6% increase in real estate tax revenue, according to Richard Killian, budget and finance director.
On the expenditures side, the $118.5 million marks a 4.8% increase over 2024, slightly above the four-year inflation rate of 4.5%. The primary drivers are increases to employee insurance coverage, a rise in overall costs and unexpected capital repairs.
Personnel costs of $45.8 million constitute the largest portion of expenditures at 39%, followed by $39.77 million for contracted services — primarily partner human service agencies — at 34%. Other expenditures include $15.5 million for operations (13% of the budget), $5.4 million for debt service (5%), $5.2 million for internal charges (4%), $3.7 million for capital items (3%) and $2.95 million in transfers (2%).
The county’s proposed capital budget is $16.5 million, down from $28.6 million in 2024. Completion of major capital projects like the courthouse retaining walls and progress on the renovations to the former Centre Crest property for a new human services building, which is expected to be completed mid-2025, account for the decrease in capital fund expenditures, Killian said.
As is typical human services makes up the largest expenditure by function at $39 million, or 33% of the operating budget and 29% of the total budget.
Revenues in the proposed budget total $116.3 million, a 3.7% increase from 2024. They include $45.97 million from state and federal grants, or 39% of the budget, $30.4 million from real estate taxes (26%), $20.9 million from departmental earnings (18%), $17.2 million from internal services and transfers (15%) and $1.8 million from interest earnings and rent (2%).
“Providing over $118 million of services from $30 million of local property taxes would not be possible without the generosity of Centre County citizens,” Board of Commissioners Chair Mark Higgins said. “They help fund the over 100 human services partner agencies who serve… over 24,000 Centre County citizens who require services annually.”
The proposed budget uses $2.2 million in fund balance and maintains reserves of 15% of total expenditures, within the range recommended by the Government Finance Officers’ Association.
Higgins noted the forecasted deficit is 1.7% of the total budget.
“We hope that conservative assumptions combined with paying close attention to the bottom line will close this gap as we have almost every year for the past 14 years,” he said.
Some small items, including setting the cost of living adjustment for non-union employees, still remain to be addressed before the final budget is presented. While the county will all but certainly have an on-time budget for what Higgins said is the 225th consecutive year, it will be completed a bit later than normal.
“One of the things we got hit with this year was the election season lasted a little longer than we were anticipating, which exhausted a lot of our time over the last several weeks,” Commissioner Steve Dershem said. “So we do have some cleanup work to do. Not anything major, but this is the general framework. … We will fine-tune it. We have 20 days to do that and we look forward to cleaning this up and having a budget ready for 2025.”
Dershem applauded what he called a “fiscally conservative budget.”
“I think this is a pretty solid budget and I think gives us the flexibility we’re going to need to handle come what may over the next year,” he said. “I’m very excited to see the actual final final version of this at the end of the month. We will probably have to tweak this a little bit and make some final adjustments, but it looks really good.”
