Booze tax may help shortfalls

A bill making its way through the state House would funnel state liquor tax revenue to municipalities that have a high percentage of tax-exempt properties, such as Nanticoke, Dennison Township and Wilkes-Barre.

The House Local Government Committee will hold a hearing today at Wilkes-Barre City Hall. Among those scheduled to make comments to the committee are Wilkes-Barre Mayor Thomas M. Leighton, Scranton Mayor Christopher Doherty and former Luzerne County Commissioner Todd Vonderheid, in his capacity as director of strategy for 10,000 Friends of Pennsylvania.

House Bill 2018 would allocate the more than $240 million taken in by the state from its 1936 Johnstown Flood Liquor Tax to a pool into which qualified municipalities could tap. A municipality qualifies if it is determined the municipality’s total assessed value of tax-exempt property equals or exceeds 17 percent of the total value of assessed property within the municipality.

The bulk of municipalities that would qualify include those with colleges, hospitals, state, county and federal government buildings or state and national parks or forests. Others, with large tracts of Keystone Opportunity Zone designations, could also fit into the equation.

The biggest winner in the state would be Pittsburgh, which could bring in about $24 million annually. Harrisburg would be looking at about $11 million annually and Easton, Bethlehem, Allentown, Erie, Scranton and Wilkes-Barre would also be major players, looking at anywhere from $100,000 to $3.2 million each. “Municipalities with high levels of tax-exempt property are at a decided disadvantage in being able to meet the fiscal needs of their community, provide essential municipal services, and be in a better position to attract much-needed economic development,” said state Rep. Robert Freeman, D-Easton, who sponsors the bill. “This legislation would provide critical funding so that these municipalities can gain a greater measure of fiscal stability and continue to provide the services that citizens expect from municipal government.”

Other Luzerne County municipalities on the likely qualifying list are Nanticoke, Luzerne, Shickshinny and Dennison Township.

Nanticoke City Administrator Ken Johnson said the addition of a few thousand dollars a year – projections show the city lined up to receive about $32,578 if the bill were in place this year – would be welcomed with open arms by the cash-strapped city. With Luzerne County Community College, a senior center and dozens of KOZ sites, especially downtown and near the Nanticoke Bridge, the city has a total assessed value of tax-exempt property of slightly over 22 percent of the total value of assessed property.

Johnson said he envisions the city using the additional revenue stream for “infrastructure repair in places we haven’t been able to do them. There are major thoroughfares that are in great need of major resurfacing.”

Counties would have to compile statistics and supply an annual report to the state showing whether municipalities qualify for the funding, and, if so, prove it with tax data and assessment figures. An equation set forth in the proposed bill would determine how the funding would be split.

Forty-five representatives co-sponsor the bipartisan legislation, including Eddie Day Pashinski, D-Wilkes-Barre, and Mario Scavello, R-Mount Pocono.

What’s Next?

Johnstown Flood Liquor Tax

After the 1936 flood, the Legislature imposed an emergency tax on all alcohol sold in the state. What was to be a temporary 10-percent tax went to cleanup, recovery and assistance to flood victims. The tax was upped to 15 percent in 1963 and then to 18 percent in 1968. All liquors sold by the state Liquor Control Board are subject to this tax, which is computed on the actual price paid by the consumer, including mark-up, handling charge and federal tax. The nearly $200 million collected annually no longer goes to flood victims, instead going into the general fund for discretionary use by lawmakers.

Clear 27°

News

Liquor tax cash would help towns with number of tax-exempt properties.

What’s Next?

Johnstown Flood Liquor Tax

Place Quick Ads