EAST STROUDSBURG — One year after approving a controversial 29% property tax increase, East Stroudsburg Borough is asking residents to absorb another hike.
The proposed 2026 budget would raise the millage rate from 7.9654 to 8.9654 mills—a 12.6% increase that officials say is driven almost entirely by ballooning debt service costs.
Borough Council is expected to vote on the $15.3 million spending plan in December.
Where the Increase Comes From
The math is straightforward: nearly the entire tax hike funds debt payments.
The debt service millage would jump from 0.9668 mills to 1.6965 mills—a 75% increase in that single line item. Meanwhile, the general fund millage rises modestly from 6.3841 to 6.6544 mills. Recreation, pension, and fire apparatus levies remain unchanged.
For a property assessed at $100,000 (roughly $265,000 in market value), the increase translates to about $100 more per year in borough taxes.
The Numbers at a Glance
Total 2026 Revenue: $15,320,936
Total 2026 Expenses: $14,500,031
Projected Surplus: $820,905
The borough’s tax base sits at $445.6 million in assessed value, where one mill generates approximately $445,658 in revenue.
Revenue Breakdown
Property taxes across all funds will generate nearly $4 million, but they represent just 26% of total revenue. The borough’s utility operations—water, sewer, and trash—drive the bulk of the budget:
Water Fund: $3.53 million in revenue, primarily from water rents ($2.95 million) and connection fees
Sewer Fund: $2.67 million, including rentals from Stroud Township ($170,000) and Smithfield Township ($42,500)
Trash Fund: $1.48 million from solid waste user fees
General Fund: $6.34 million from property taxes, earned income tax ($1.225 million), local services tax ($325,000), rental licenses ($220,000), and various permits and fees
The borough also expects $290,000 in interest income across funds—a reflection of higher rates on municipal deposits.
Spending Priorities
Regional Police: The single largest expenditure is the $3.247 million payment to the Stroud Area Regional Police Department, consuming more than half the general fund’s operating budget.
Wastewater Treatment: The sewer plant operation costs $1.04 million, covering staff salaries, chemicals, laboratory fees, sludge disposal, and system maintenance.
Water Department: Operations run $1.23 million, including a new $45,000 contract for meter replacement work and $140,000 in treatment chemicals.
Street Department: At $917,256, this covers road crews, equipment, and vehicle maintenance split across multiple funds.
Code Enforcement: The borough budgets $267,334, including $180,000 for contracted zoning and codes services.
Fire Department: Operating costs total $119,424, with an additional $23,924 for the pumper lease paid from the dedicated fire apparatus fund.
Debt Load Driving the Tax Hike
The budget reveals why debt service is consuming an increasing share of tax revenue.
Principal payments total $521,344 across multiple obligations:
- ESSA 2009 bonds: $144,500
- ESSA 2016 bonds: $170,210 (split between water and debt service funds)
- PennVest water line loan: $50,087
- PennVest dam loan: $41,897
- ESSA 2021 Middle Dam bonds: $34,650
- Taxable Series 2025 GO bonds: $80,000
Interest payments add another $415,296, including $133,076 on the Series AA 2025 bonds and $64,188 on the SARP building debt.
Total debt service for 2026: $936,640.
The Non-Taxable Property Problem
East Stroudsburg’s tax base challenge is well documented. The borough hosts major institutional properties that pay nothing in property taxes:
East Stroudsburg University occupies 258 acres with 57 buildings, including housing for nearly 3,000 students.
Pocono Medical Center operates the region’s only Level III Trauma Center with 264 beds.
Affordable housing complexes include seven developments, 120 Section 8 apartments, 90 public housing units, and 119 approved low-income units.
The Housing Authority does make a payment in lieu of taxes (PILOT), but the borough budgets just $10,000 from that source.
Combined, these non-taxable properties represent billions in assessed value that generates zero property tax revenue, forcing the burden onto the $445.6 million in taxable properties.
Employee Costs
Healthcare remains a major expense. The borough budgets $1.177 million for medical insurance across departments, plus $41,177 for life and disability coverage.
The pension minimum municipal obligation totals $322,071, split across the general fund, water, sewer, and trash operations, with $32,207 flowing through the dedicated pension fund.
Unemployment compensation is budgeted at $29,000.
Infrastructure and Capital
The budget is notably light on capital improvements. Most infrastructure spending flows through dedicated funds:
Highway Aid Fund: $391,750 in expenses, covering street paving ($100,000), street lighting electricity ($125,000), snow and ice removal ($79,000), and storm sewer work ($57,000).
Recreation Fund: $272,846, including the $194,646 stewardship contribution to the Stroudsburg/East Stroudsburg Regional Recreation Commission (SROSRC) and pool maintenance.
The borough received a $137,000 LSA grant, with $100,000 going to general operations and $37,000 to water infrastructure.
What’s New
A few line items reflect emerging priorities:
Short-term rental licenses appear for the first time at $3,225, following the borough’s adoption of regulations governing vacation rentals.
MS4 stormwater compliance costs $100,000, reflecting ongoing federal mandates for municipal separate storm sewer systems.
Levee maintenance jumps to $85,000, with another $35,000 for equipment maintenance and $10,500 for engineering—a recognition of flood control infrastructure needs along Brodhead Creek.
Context: Two Years of Increases
If approved, the 2026 budget would mark the second consecutive year of significant tax increases.
In December 2024, council approved a 29% hike that pushed millage from 6.17 to 7.9654 mills. That increase—on top of a 15% hike the prior year—sparked resident outrage at public meetings.
Borough Manager Kelly Lewis attributed those increases to the end of federal COVID relief funds and inflationary pressures. The 2026 increase is more narrowly focused on debt obligations.
For comparison, neighboring Stroudsburg Borough’s millage stands at 11.202 mills—still higher than East Stroudsburg’s proposed rate despite East Stroudsburg having 40% more residents and nine additional street miles to maintain.
What Happens Next
The proposed budget and tax ordinance (No. 1419-25) must be advertised and adopted by council before year’s end. A public hearing is expected at the regular council meeting in December.
Residents can review the full budget at Borough Hall, 24 Analomink Street, or request copies from the borough office at 570-421-8300.
2026 Millage Breakdown:
- General Fund: 6.6544 mills
- Debt Service: 1.6965 mills
- Recreation: 0.4464 mills
- Pension: 0.1107 mills
- Fire Apparatus: 0.0575 mills
- Total: 8.9654 mills