Langerholc’s Proposal Would Return Johnstown Flood Tax Dollars to Area

Seeking to provide greater financial assistance to Pennsylvania’s struggling municipalities, Senator Wayne Langerholc, Jr (R-35) has circulated a co-sponsorship memo for legislation that will increase funding for grants and loans for distressed municipalities through an existing state funding source.

Langerholc’s bill 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, intended 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.

“My bill would restore the original intent of the Johnstown Flood Tax, which was to assist a distressed municipality, by dedicating 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.”

According to the Department of Revenue, Langerholc’s bill would generate approximately $19.3 million annually, based on figures from 2015-16.  The money collected by the Treasury would be distributed to the Commonwealth Financing Authority to award grants to municipalities under Act 47.  This year’s budget allocated just under $2 million to those programs.

CONTACT: Gwenn Dando 717-599-1164