Public Input Sought -Earned Income Tax
Honesdale Borough Council invites those who live or work in the Borough to a public comment session on the reduction of general-purpose real estate taxes and the imposition of an Earned Income Tax (EIT) to be conducted at 6 PM in the Honesdale High School auditorium, 359 Terrace Street, Honesdale, on Wednesday, September 29, 2021. This will be an in-person socially distanced gathering. The following information is provided for review prior to the session.
If enacted, the Borough would levy a 1% EIT on the earnings of both residents and non-residents working within the borough. However, because EIT funds are remitted to the municipality in which the individual lives (unless the municipality in which they live does not levy an EIT), the borough will conservatively assume that eventually it will only receive EIT funds from Honesdale Borough residents. Berkheimer, the EIT tax collector designated for Wayne County, estimates that the Honesdale Borough will collect $320,000 to $340,000 in the first year and $430,000 to $460,000 in subsequent years from residents only. Currently the school district cannot collect the EIT tax, so the Borough is able to receive the entire maximum allowed EIT of 1%. In addition, the Borough intends to reduce 2022 property tax millage by a minimum of 1 mill to offset the expected revenues from the EIT.
However, because there are currently only four (4) municipalities within Wayne County that have enacted an EIT, Honesdale Borough would likely collect significantly more than the above estimate for the first year. As of now, it is the intention of the Finance Committee to use the initial (assumed to be one-time) income from non-residents primarily to help fund the repair and replacement of the Borough’s stormwater systems. Furthermore, the Finance Committee proposes that the bulk of the resident-only (recurring) portion of the EIT be used to help fund the Honesdale Borough Police Department and the Public Works Department.
One of the most positive results Council hopes to obtain is to reduce our property tax millage and limit future property tax increases. Not only will this help overcome the struggle of a stagnant property tax base, but it will also help to take some tax burden off many of our lower income homeowners within the Borough and make living in Honesdale generally more affordable. Additionally, 43% of real estate within the Borough is non-taxable. While we are very thankful to be home to so many great non-profit entities, the EIT will also help us fill the income gap caused by non-taxable property.
Furthermore, of the 2,559 municipalities within Pennsylvania, only 93 of them do not levy an EIT. Because municipalities are limited in the ways they can generate revenue, the Borough Finance Committee views the EIT as one of the most equitable methods that can be used to help fund Borough operations and projects in the future.
The Borough Council looks forward to hearing the public’s comments on the EIT and will use your input to encourage constructive conversation at upcoming meetings. If you are unable to attend, please submit your written comments and concerns by noon on September 28, 2021. Comments can be emailed to firstname.lastname@example.org ; mailed to 958 Main Street, Honesdale, PA 18431; or dropped off at the Borough Office Monday through Friday from 9 AM to 3 PM.
See sample Ordinance here:
See informational pamphlet here:
File Your Property Tax/Rent Rebate Program Applications Online
Property Tax/Rent Rebate Program claimants now have the option to submit program applications online with the Department of Revenue’s myPATH system. Filing online leads to fast processing, easy direct deposit options and automatic calculators that will help you apply for your rebate. Visit mypath.pa.gov to file your application.
The rebate program benefits eligible Pennsylvanians age 65 and older; widows and widowers age 50 and older; and people with disabilities age 18 and older. The income limit is $35,000 a year for homeowners and $15,000 annually for renters, and half of Social Security income is excluded. Spouses, personal representatives or estates may also file rebate claims on behalf of claimants who lived at least one day in 2018 and meet all other eligibility criteria.