Opinion

OUR OPINION

February 23, 2008

Cheers to state liquor tax that will help our towns

CITIES AND SOME municipalities have been taking it on the fiscal chin for decades. Finally, 45 state legislators recognize this and are proposing to channel a dependable income source their way.

For that reason we support House Bill 2018, which would make available an annual pool of about $240 million to 500 municipalities, including five in Luzerne County.

For decades locations large and small – from Pittston and Wilkes-Barre to the state’s largest cities – were where most people worked and lived.

It’s where our churches were built, schools and colleges blossomed and governments erected courthouses, offices and even prisons. Also dotting the urban landscape are priceless institutions such as hospitals and parks.

The rub is, all are exempt from the real estate tax, which is a major income source for municipalities.

While many of these institutions were flourishing, a sizeable chunk of the population was migrating to the suburbs. Store owners followed them, leaving the cities with fewer people and less commerce.

In short, the real estate tax base eroded but progressive tax laws were not enacted to make up the shortfall.

Thankfully, the institutions remained, and their presence is valued by everyone, regardless of where they live.

Many cities like Wilkes-Barre and Scranton spring to life during the business day with an influx of workers and students jockeying for precious parking spots that the cities must provide. Offices are filled, classrooms are teeming with activity and the courthouse bustles with activity. After hours, most head home to the suburbs.

Despite shrinking tax bases, town officials still deal with the traffic generated by non-residents, the services they need and the police protection they deserve.

House Bill 2018 would divert the 18 percent the state levies on retail wine and liquor sales from the state coffers to some towns.

Under House Bill 2018, qualifying communities must have nonprofits making up 17 percent or more of their tax bases. Enacted to rebuild flooded Johnstown in 1936, the tax – like many levies – never went away, even decades after Johnstown was resurrected.

In fact, the “temporary tax” on liquor and wine increased from its original levy of 10 percent to 18 percent today. To this day it is still known as the “Johnstown Flood Tax” and used as a slush fund for the state, with some money used for flood protection.

For Wilkes-Barre, where about 21 percent of the assessed value is tax-exempt, House Bill 2018 would mean about $140,000 more annually.

Nanticoke, which still bears the distressed-city moniker, would get $32,578. Tiny Shickshinny would net $3,731. Dennison Township would receive $10,731 and Luzerne Borough, $6,418.

Enacted to save one city more than 70 years ago, the Johnstown Flood Tax now can be put to good use in many towns, large and small.

We’ll raise our glass to that cause any day.

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