Pennsylvania Liquor Tax Should Go to Disaster Relief Fund: Lawmaker

A western Pennsylvania lawmaker is proposing to divert some of the money from the “Johnstown Flood Tax” on alcohol back to its original purpose — flood and other disaster relief.

Sen. John Wozniak, D-Cambria, is proposing to use one-fifth of the 18 percent tax to create a fund to provide relief from disasters such as flooding.

“This will be a real `rainy day fund’ that will allow us to act quickly the next time nature overwhelms local communities,” he said in a release posted last week on his website.

Wozniak told The (Pottstown) Mercury that he recognizes the irony of proposing such a fund, since he hails from Johnstown himself. “I know my floods,” he joked.

But since repealing the tax has proven to be politically impossible, he said, efforts might be better directed to trying to divert some of it back toward its original purpose.

“It was a good idea 75 years ago, but over time it was used to plug holes in the General Fund,” his statement said. “With more roads and buildings covering the land, the so-called `once in a lifetime’ weather events are occurring with more frequency, and this legislation will recognize that.”

Wozniak has proposed similar legislation in the past without success, but he said he hopes the recent flooding from Hurricane Irene and Tropical Storm Lee will spur support for the idea now.

The flood tax was not created in response to the famous 1889 Johnstown flood that killed 2,209 people but to help the city recover from a 1936 flood that killed about two dozen people, destroyed 77 buildings and damaged nearly 3,000 more, according to the Johnstown Flood Museum site. Originally a 10 percent tax, the levy generated sufficient money to rebuild the city in a few years but was nevertheless made permanent in 1951 and expanded twice in the 1960s to the current 18 percent levy on spirits.

The tax now generates some $200 million each year for the general fund, and lawmakers have been reluctant to give it up, rejecting repeal efforts in 2001 and 2003.

Since 2008, the Pennsylvania Tourism and Lodging Association has called for the elimination of the tax, calling it “an enormous burden for an important Pennsylvania industry that operates on a slim average profit margin, even in good economic times.”

Wozniak’s proposal would also require a two-thirds vote of the General Assembly to use the relief fund money for “any other purpose than direct relief.”

House Majority Leader Mike Turzai, last month called for replacing the flood tax with a per-gallon tax as part of a plan to turn over Pennsylvania’s state-controlled sale of liquor and wine to private business.