|Posted:||November 15, 2017 02:12 PM|
|From:||Senator Wayne Langerholc, Jr.|
|To:||All Senate members|
|Subject:||Providing for Substantial Grants to Act 47 Municipalities|
|In the near future, I plan to introduce legislation which will increase the amount of available grants to distressed municipalities under Act 47 through an existing funding source. On June 9th of 1936, the General Assembly and the Governor enacted Act 4 which levied a tax on alcoholic beverages to aid the City of Johnstown which had just suffered the St. Patrick’s Day Flood of 1936. This tax, originally a temporary levy of 10%, became known as the “Johnstown Flood Tax.”
As we have come to know, temporary taxes are rarely temporary. The 10% tax was increased to 15% in 1963, and again to 18% in 1968. The Johnstown Flood Tax still exists today, and no longer dedicated to assist a distressed municipality. The current 18% tax on alcoholic beverages, originally intended to be temporary, now serves as a General Fund booster.
Under my legislation, 5.6%, of the Johnstown Flood Tax will be dedicated to help distressed municipalities under Act 47. According to the Department of Revenue, that would equate to $19.3 million of the money this tax generated in 2015-16. The money collected by the Treasury will be directed to the Commonwealth Financing Authority to award grants to municipalities under Act 47. Currently, DCED awards grants and loans to Act 47 municipalities, but this year’s budget allocated just under $2 million to those programs.
Please join me in co-sponsoring this important piece of legislation to restore the original intent of the Johnstown Flood Tax which is to assist a distressed municipality.
Introduced as SB1225