Honesdale voters have rejected the borough’s proposed earned income tax (EIT), leaving local officials with tough choices for the 2026 budget.
The Honesdale Borough Council was split 3-3 on the proposal during a pre-Thanksgiving meeting. Mayor Derrick Williams cast the tie-breaking vote against the tax, officially stopping its implementation.
The EIT would have added up to 1% on the earned income of residents and workers in Honesdale. About 500 residents already pay an EIT to other municipalities where they work, but the local tax would have kept that revenue in Honesdale to fund projects like stormwater system upgrades.
Strong Opposition from Businesses and Residents
Business owners and working-class residents led opposition to the tax. Over 30 local businesses submitted a letter against the EIT, warning it could push employers and employees out of Honesdale. Critics also pointed to the borough’s surplus budget and questioned the need for the tax.
“Expecting taxpayers to absorb these costs for future unknown expenses impairs our own finances today,” said one resident at the meeting.
Proponents argued the tax would diversify Honesdale’s revenue beyond property taxes, protecting fixed-income homeowners while preparing for future costs. Mayor Williams emphasized that many working residents fall into the “asset-limited, income-constrained, employed” category, meaning the EIT could have hit struggling households the hardest.
Next Steps for Honesdale’s 2026 Budget
With the EIT off the table, borough officials are revising the 2026 budget. Initial projections estimated $400,000 in first-year revenue from the tax. Early signs suggest Honesdale may cut expenses rather than raise property taxes, but final decisions will depend on upcoming council meetings.
Some local business owners say they still feel underserved by the borough despite programs like the Greater Honesdale Partnership, which provides grants for infrastructure and building improvements.
Coverage by The River Reporter
Liam Mayo, news editor at The River Reporter, covered the council meeting and community reactions. For more, visit riverreporter.com.
Image: Paul Hopkins, owner of Tri County Distributors, speaks on the potential imposition of an Earned Income Tax during a Monday, November 24 meeting of the Honesdale Borough Council. (Credit: Liam Mayo)