Centre County’s proposed 2022 budget is a unique one, but as has been the case for the more than a decade, it includes no property tax increase.
The tentative budget adopted by the Board of Commissioners on Tuesday maintains the millage rate at 7.84 mills for the 12th consecutive year.
“This proposal represents a comprehensive analysis of previous year and projected revenues and expenditures,” Centre County Administrator Margaret Gray said. “Based on this review, the proposed budget allocates revenues to carry out the county’s mission of providing the highest quality of services, programs and supports to the citizens of Centre County.”
The proposed budget will be available for public review on the county website for 20 days, with adoption of a final budget scheduled for Dec. 28.
With an influx of pandemic relief funding from federal and state governments, the county’s proposed operating budget of $106.4 million is a 31.7% increase over 2021.
Including a $1.4 million capital budget that funds completion of courthouse renovations and other facilities upgrades and repairs, the total proposed county budget is $107.8 million.
Fueled primarily by COVID relief funds from the Emergency Rental Assistance Program and the American Rescue Plan Act, the county’s revenues increase by 35%, including a special revenues fund increase of $27.4 million, more than double the 2021 amount. The county expects to receive about half of its $31.7 million ARPA allocation in 2022.
The boost in grant funding comes as the county continues to anticipate pandemic-related impacts, according to the budget presentation by Corey Troutman and Ed Zack of Susquehanna Accounting and Consulting Solutions.
A projected growth in property assessments of .86% would be the county’s lowest since 2013 and marks a decline for the second straight year. Interest earnings are projected at $50,000, a decline for the third straight year and down from $595,000 in 2019.
Other areas that could continue to see potential impacts related to the pandemic are the real estate tax collection rate, hotel tax revenue and reduced revenue for services.
“The good news that we have for that is for the American Rescue Plan [funds], they enable us to continue to budget a consistent level of providing government services and really take any of those risks that we’d normally have in that process and utilize revenue loss funds to cover those costs,” Troutman said.
He added that $2.5 million in ARPA funding is being used to continue to provide county services at their existing levels.
“This was probably the most convoluted and unique budget that I’ve had the opportunity to experience,” Commissioner Steve Dershem said. “The whole lay of the land is different in county government these days. We had to give and take so many different areas and still try to work within our means and stay within what i consider prudent financial boundaries.
“Moving forward I think this is a sound budget but boy I’m gonna tell you if I would ever have thought there would have been a day when I saw $107 million in a county budget, that’s a game changer for us and how we manage this moving forward is going to be a challenge.”
On the revenue side, grants and payments in lieu of taxes account for 57% of the budget, while county real estate taxes are 27%. Departmental earnings (12%) and internal charges for services (4%) make up the rest.
For expenditures, human services and other allocations account for more than half of the budget, while corrections, judicial administration and county administration are another third.
General funds expenditures increase by $1.85 million, or 4.7%, over 2021, including $1.2 million for salaries and benefits.
Because salary adjustments made this year were not initially included in the 2021 county budget, the increase reflects increases made in 2021 and 2022. Employees will see no increase in health insurance contributions
The increase in wages is equivalent to $1 an hour for nonunion employees, with the exception of emergency communications telecommunicators, who will see a higher increase. Union employees will receive their contractually obligated 4% increase.
Commissioner Michael Pipe noted that the county is in the process of completing its salary, compensation and classification study, which is expected to recommend wage increases for county employees.
“That is a big cost driver that is going to stay with us not just in 2022 but in future years, but it’s a recognition prior to the finalization of the salary, compensation and classification study that we do need to increase salaries a little bit across the board,” Pipe said. “We’re especially cognizant that a percentage increase would not have as much of an impact on some of the employees that we have on the frontlines that are making a little bit lower on the salary range. This will help give them a very large percentage increase. We’re very mindful that we need to increase some of those wages. There potentially might be more wage increases once we finalize the archer study so i think that’s important to mention as well. This not the finalization of that study but this is a step in the direction we need to head.”
Other general funds expenditures increases include $252,000 for a systems upgrade in the prothonotary’s office; $237,000 for the elections office, largely related to mail balloting, advertising and other requirements; and $147,000 for increases to contracted medical services and food service costs at the correctional facility.
All other expenditure increases are funded through restricted revenue increases like the ARPA funds, Troutman said.
Commissioner Mark Higgins said the state and federal grants will provide more services per tax dollar for county residents.
“Normally the county would deliver a $1.80 of services for every dollar of local property tax collected,” Higgins said. “Thanks to state and federal grants I think this year we’ll be well over that maybe as much as $2.50 of services for every dollar of local property tax.”
Pipe said the federal dollars give the budget, which may be fine-tuned over the next few weeks, much needed flexibility.
“As you can see it is a unique budget. I think what it does is it allows us to be very agile and nimble as we go into the new year,” Pipe said. “It has a tremendous amount of different paths we can take depending on that ARPA revenue that we can offset some of our revenue decreases. We’ve seen some really historic revenue decreases over the past two years since the pandemic began, especially in our courts and corrections. We just want to be mindful that we may need to be backfilling that with some of our ARPA funds.
“Overall I think it is a good budget. It really outlines our priorities for the coming year and it allows us to keep services going for folks here in Centre County.”
