Senate Committee Passes Langerholc’s Legislation To Return Johnstown Flood Tax Dollars to Area

A Senate committee today approved legislation sponsored by Senator Wayne Langerholc, Jr. (R-35) that would increase funding for grants and loans for distressed municipalities through an existing state funding source.

Senate Bill 570 was passed by the Senate Community, Economic and Recreation Development Committee.  It would dedicate a portion of the existing “Johnstown Flood Tax” to help municipalities designated as “financially distressed” under Act 47, the Municipalities Financial Recovery Act of 1987.

The tax to help the city recover from the devastating St. Patrick’s Day Flood of 1936 was initially intended to be temporary and was levied on alcoholic beverages at 10 percent.  That tax was increased to 15 percent in 1963 and again to 18 percent in 1968.  It remains in effect today, with proceeds deposited in the state’s General Fund budget.

“Make no mistake – this is not a new tax.  It is restoring the original intent of the Johnstown Flood Tax and bringing that money back to Act 47 distressed municipalities.  It would dedicate 5.6 percent of the proceeds to be distributed to municipalities experiencing severe financial difficulties,” Langerholc said. “The money returned to Johnstown would aid in the economic recovery of our city and provide much-needed assistance towards those efforts.”

The legislation would require the Department of Treasury to direct approximately $20.6 million annually, to be distributed to the Commonwealth Financing Authority to award grants to municipalities under Act 47.  This year’s budget allocated about $1.6 million to those programs.##

CONTACT:

Gwenn Dando
(717)787-5400
gdando@pasen.gov