Why is the budgetary problem with revenue and not expenditures?
Just like at home, expenses generally rise at the rate of inflation. In any given year, if the cost of groceries, fuel and other home expenses increase with inflation, and you don’t receive a raise in pay, you would experience what the Borough has been experiencing over the last ten years. Expenses have been rising at the rate of inflation and at an even greater rate in the case of health care and pension costs, while revenue has not been increasing at a comparable rate. The main sources of revenue for the General Fund consist of taxes. The main two taxes are Real Estate and Earned Income Tax (EIT). Real Estate taxes are based on the Taxable Assessed Value of properties in the Borough. The only time the Assessed Value of properties increase is when there is new development or a county-wide reassessment. The last reassessment was in 1995 and the supply of developable land in the Borough is minimal. Because the Assessed Value has not increased, the tax revenue only increases when the millage rate is increased. We call this a lack of “natural revenue growth.” Similarly, EIT taxes are based on the earned income of residents of the Borough. We are experiencing a trend of higher wage earners migrating to the townships surrounding the Borough, so the Earned Income of residents in the Borough has also not been increasing. This contributes to the lack of “natural growth” in the Borough’s revenue.

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1. What is a mill?
2. Why can’t the Borough borrow money from the Parking Fund for the General Fund?
3. Why is the budgetary problem with revenue and not expenditures?
4. Is the Borough running out of money?
5. What is the difference between what Penn State University would pay in real estate taxes versus what is received in impact fees?
6. How often does the Borough replace computer equipment and vehicles?
7. Why don’t the local municipalities consolidate?
8. Does the County or School District provide any financial contributions to the Centre Region Council of Governments (COG)?
9. Has there been any movement of Penn State University to the south of College Avenue and do these properties pay Real Estate Taxes?
10. Is there a forecast for Earned Income and Net Profits Tax related to new development within the Borough?
11. When was the Business Privilege Tax (BPT) eliminated?
12. How can the Borough tax rainwater?