Long after Johnstown’s rivers receded in 1936, a so-called “temporary” liquor tax to aid the city’s recovery has remained – even though it has been nearly 80 years since it’s been used to benefit Johnstown or any statewide flood relief.
And with state dollars still held up by a nearly year-long budget stalemate, it’s not likely any of that will change anytime soon, a Johnstown lawmaker said Tuesday.
State Rep. Bryan Barbin, D-Johnstown, is just one of numerous representatives from both sides of the aisle who’ve taken aim at the “misleading” Johnstown Flood liquor tax.
But he realizes that now isn’t the time to make amending the tax a priority.
“In the difficult budget time we’re in – still trying to close out the 2015-2016 budget – (the flood tax) isn’t the first thing anyone wants to look at,” said Barbin, who is in his fourth term serving the 71st district.
Gov. Tom Wolf and state leaders from both sides of the aisle are heading toward their ninth month still deadlocked on a final 2015-16 budget.
Hot-button items like liquor reform and resolving state pension system’s issues – once viewed as likely budget targets – “aren’t going to happen” under this year’s plan, Barbin said. He and many other lawmakers are hopeful a solution can be hammered out to end this year’s impasse while shifting quickly to solving issues like that – and education shortfalls – this summer with the 2016-17 plan.
Moving forward, he’s still hopeful he can rally support to redirect the 18 percent flood tax on liquor back to helping cities overcoming disasters – more specifically, economic ones.
He has also proposed directing a portion of the tax’s revenue to cover state pension obligations before phasing out the tax in 2021.
“Right now, that tax is just benefiting the general fund, and with the current situation we’re in, no one is moving that,” he said. “But in the future, we should be looking at using that $350 million it’s generating each year to help cities like Johnstown that have been struggling in the economic recovery plan for decades.”
Major floods have been a big blow to Johnstown’s economy over the past 125 years.
And the St. Patrick’s Day flood of 1936 was no exception.
It caused an estimated $41 million in damage at the time, destroying bridges and buildings, while claiming 24 lives, Johnstown Area Heritage Association Executive Director Richard Burkert said.
The cleanup itself also carried a price tag – and Johnstown received plenty of aid, but Barbin notes that the flood tax was used for the city one year and then was shifted elsewhere the next.
“We benefited from it for one year – that’s it,” Barbin said.
Watchdogs often call the tax a “hidden” one. It’s already calculated into the sticker price for wine and liquor before final state sales taxes are added.
Barbin’s latest proposal called for repealing the tax entirely after it generated funds for both distressed cities and the pension system for approximately a decade.
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