Councilmember Portney urges borough to seek share of county hotel tax revenue

Councilmember Portney urged State College Borough staff and fellow council members on July 21 to explore whether the borough can obtain a portion of hotel‑tax revenue that currently flows to the Happy Valley Venture Bureau.

Portney said Centre County’s recent increase in its hotel tax — from 2.5% to 5% — produced an estimated $4 million in additional revenue for the Happy Valley Venture Bureau and that, if State College could capture 20% of county collections generated by visits to the borough, that might amount to roughly $400,000 annually. He asked staff to investigate whether the borough could secure a share of that revenue or otherwise request funds from the bureau.

Manager Fontaine and other staff explained that Pennsylvania law generally grants the authority to collect local hotel/occupancy taxes to counties rather than most municipalities; only a few Pennsylvania cities have separate authority to levy local hotel taxes. Fontaine said the county’s hotel tax is also limited by statute in how it may be spent, and he encouraged Portney to make a formal request to the bureau if council so directed.

Portney clarified he was not proposing a new municipal tax; he asked the borough to ask the Happy Valley Venture Bureau to provide a portion of the funds the bureau currently receives. No formal motion was made; Portney said he would submit his findings to the borough manager for consideration during the budget cycle.

Why it matters: Portney framed the request as a way to expand municipal revenue without imposing a new tax on borough residents. Staff cautioned that statutory limits on municipalities’ authority to levy or collect hotel taxes mean the borough’s options are constrained and would likely require negotiation with the county or the bureau.