HONESDALE, PA — During a special meeting on December 6, Honesdale Borough councilors once again discussed their budget for 2024, which has been revised several times in recent weeks. The borough tentatively adopted, in a 5-1 vote, a roughly $5.5 million budget, with a half-mill increase on taxpayers. The budget will be officially adopted at its December 28 meeting.

The rise and fall of EIT

In November, the borough was considering instituting an earned income tax (EIT), which would have cost employees who live and/or work in the borough one percent of their paychecks. The tax was projected to bring in about $360,000 in revenue. Much of this money would go toward updating the borough’s aging infrastructure, which has been getting battered by rainfall every year in recent memory.

Residents came out in full force, providing one impassioned speech after another to decry the proposed EIT as an unfair burden that would hurt local employers.

The borough voted through the EIT, despite the residents’ opposition. However, at the following meeting, councilor and finance committee chair William McAllister proposed an alternative. He said that he could trim the budget by about $150,000 and raise the millage rate to bring in an additional $200,000 in property taxes, eliminating the need for EIT.

Councilor Jim Hamill spoke out against this idea. For one, he had concerns that McAllister hadn’t provided specifics about where these cuts would be made. Second, he felt that raising property taxes would be overburdensome on residents who may be already struggling to keep a roof over their heads.

After some heated back and forth between McAllister and Hamill, the council eventually voted, 5-2, to scrap EIT in favor of budget cuts and higher property taxes. McAllister said he would have the specifics on those cuts at the next meeting.

More than $480K in cuts

At the most recent meeting, McAllister explained how he had trimmed the budget by significantly more than the $150,000 he had promised.

The cuts came from a range of sources. After securing “the reconciled balance of the checking account for the general fund,” McAllister said “the funds there actually increased.”

An emergency repair project slated for a dilapidated retaining wall on Castle Street will cost $60,000 less than anticipated. 

The invoices for November have been paid, thereby reducing another $159,000 from the borough’s expenditures. 

The salary for the newly created borough manager position has been reduced by $30,000 to an annual salary of $100,000.

McAllister also eliminated $5,000 for new parking meters, as the borough is no longer planning to purchase any in the coming year. Finally, future projects that the DPW will likely not be able to get to in 2024 were taken out of the budget, cutting an additional $3,600.

With these cuts, the advertised, balanced budget comes out to $5,473,797 in both expenditures and revenue.

Stormwater vote

Hamill expressed concern that the expenditures slated for stormwater repairs, which came in at just over $300,000 in the draft budget, were too conservative given past stormwater costs.

“In this calendar year, we’ve spent three-quarters of a million dollars on stormwater,” Hamill said. “How are we arriving at the $310,000?”

A budget is “an estimate, not a fact” responded McAllister, who also chairs the stormwater committee. He said that if the stormwater costs prove to be higher, the borough would secure financing to cover that. 

Hamill noted that interest rates for borrowing are “extremely high” and said he just wanted to be “realistic with taxpayers.”

“We just spent $750,000 of taxpayer money to fix stormwater issues in 2023. If you think 2024 is going to be a bargain, or not incur that significant amount of revenues, I think you’re doing a disservice to the public.” 

McAllister said that if stormwater costs prove to be inordinately high, the borough might create a stormwater authority and the expenses will be “dealt out to the people who are responsible for impervious surfaces [which do not absorb stormwater] around the community.”

After this discussion, the council held a roll-call vote to tentatively adopt the budget as presented. Councilors Michael Augello, Tiffany Rogers, David Nilsen, Jason Newbon and McAllister all voted yes. Hamill cast the lone no vote. Councilor Eric Cooley was not in attendance.

The budget is available for inspection at Borough Hall on Main Street and online at www.honesdaleborough.com. The council will meet again on Thursday, December 28, to officially adopt the budget, though it may be reopened again in January.