2010-03-18 / Local & State

Lawmaker Proposes Redirecting Pa. Flood Tax Money

JOHNSTOWN, Pa. (AP) – Nearly 75 years after the 1936 flood in Johnstown, a tax on alcohol that bears the name of the disaster still sends millions annually into state coffers.

But a state lawmaker now wants to use part of the money to clean up new “economic catastrophes’’ for a decade before eliminating the tax altogether.

“I think it is time to revert this tax back to its original purpose and help local governments and programs that are facing the imminent threat of bottoming out,’’ Rep. Bryan Barbin, said last week.

The tax was instituted in 1936 after St. Patrick’s Day floodwaters killed several dozen people and caused an estimated $41 million in damage. Originally a 10 percent levy on liquor, the tax was used to help with cleanup but remained after the work was done.

Raised twice over the decades since, proceeds of the current 18 percent tax on wine and other liquor sales generates $270 million that goes directly into the state’s general fund, Barbin said. His measure, introduced this week, would direct those funds to battle urban blight and the increase in the state’s pension system.

Ten percent of the tax would be transferred to a Johnstown Flood Tax Trust fund to clean up decrepit city properties. From next year to 2013, funds would supplement revenues of the Pennsylvania Public School Employees Retirement and State Employees Retirement systems, at a time when contribution requirements are expected to increase greatly.

Barbin said the tax money would pump $2.3 billion into the pensions by the time the Johnstown Flood Tax would be repealed under his bill in 2021. Some lawmakers have been calling for years for the tax to be dropped, especially as state sales of liquor have reached new highs in recent years.

Pennsylvania Liquor Control Board officials said such changes in the funding would be up to state lawmakers.

“Our role is to serve as a resource to the legislators and the governor,” PLCB spokesman Nick Hays said.

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