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Tax increases inevitable for Honesdale?

By OWEN WALSH
Posted 11/26/19

HONESDALE, PA — While at its monthly council meeting on November 11, it was clear that some borough councilors were less than satisfied with the 2020 budget it had tentatively adopted the prior …

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Tax increases inevitable for Honesdale?

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HONESDALE, PA — While at its monthly council meeting on November 11, it was clear that some borough councilors were less than satisfied with the 2020 budget it had tentatively adopted the prior week.

“We were presented with two options, high and very high [tax increases], and those were kind of it,” said councilor Jim Jennings.

As it stands, next year’s budget will require raising taxes by about 13 percent, that would be the borough’s fourth consecutive increase—an overall 41 percent rise since 2016.

In response to some of the councilors’ concerns, President Mike Augello had sobering remarks about the state of Honesdale’s finances.

“Honesdale Borough is home to churches, it is home to a [non-profit] hospital, it is home to public county and state agencies and offices, none of which are taxable, about half of the borough is actually taxable,” he said. “Unfortunately we do lose properties every year, someone tears down a building to put up a parking lot; you don’t see new construction going on; you don’t see much in the way of remodeling, which can raise the value of properties; and our tax base, like it or not, is shrinking.”

Augello said the only solution to the array of setbacks is to raise property taxes.

“Every year, we are going to see our costs go up, we are going to see our property values and [available properties] go down, and that’s why we’re in a never ending spiral of seeing tax increases,” he said.

As a property and business owner in the borough himself, Augello has said in previous meetings that he fears taxes may soon make it too expensive to live in the borough.

He’s not the only one. David Nilson, a regular attendee at public mjeetings, owns several properties in the borough which he rents out to tenants. As taxes go up, so do his rent fees—Nilson said he’s quickly approaching a cap on how much he can reasonably ask tenants to pay.

“The rents that I charge can only go so high before the taxes catch up to me, and then the profit is not there, and then there’s no reason for me to own [borough property] as an investment, and I’m going to sell them all,” he said, adding he has already put one property on the market for that reason. “I can’t raise rents past a certain threshold, and I’d just have vacancies, and then the longer they sit the deeper in debt I get.”

Coleen Tuman, Honesdale’s tax collector, said that the tax increases in the past several years have not had a significant impact on residents’ paying their bills on time or not.

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