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FOR IMMEDIATE RELEASE |
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State
Rep. Bryan Barbin
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Barbin bill would return Johnstown Flood Tax money for original purpose
HARRISBURG, March 10 – State Rep. Bryan Barbin, D-Cambria, introduced legislation this week that would return the Johnstown Flood Tax Money to its original purpose of dealing with economic catastrophes, and would phase it out by Jan. 1, 2021.
The tax was originally enacted in 1936 as relief for Johnstown from the destruction of the flood, but a year later the proceeds were transferred to the state's General Fund. The 18 percent tax on liquor currently produces annual revenues of $270 million.
"In light of the seriousness of our economic struggles, and considering that this tax was originally meant for the hardships faced after catastrophe, 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," Barbin said.
The legislation, H.B. 2307, would phase out the tax by 2021, but in the meantime would direct the money to be used for two economic emergencies: urban blighted property and the state pension system spike.
"The issue of urban blight has been growing in first- and second-class cities, as well as second-class-A and third-class cities as a result of the failure to pass meaningful tax reform," Barbin said. "And as a result of Act 9 of 2001 and its changes to the way the state teacher and state employee retirement system money was funded and used, the state teachers and state employee pension system is in dire need of funding to avoid local property tax increases."
Barbin said for four years, 10 percent of the tax would be transferred to the Johnstown Flood Tax Trust Fund to be distributed proportionately for blighted property. From 2011 to 2013, General Fund monies from the flood tax would be transitioned to supplement revenues to the state pension systems -- PSERS and SERS, the Pennsylvania Public School Employees' Retirement System and State Employees' Retirement System. On Jan. 1, 2021, the emergency tax meant for Johnstown would be eliminated, having provided $2.3 billion to lessen the expected pension spike and $100 million to remove blighted properties throughout the Commonwealth.