Pennsylvanians still paying hidden alcohol tax that was supposed to be temporary

PITTSBURGH — You may not realize it because it doesn't show up on the receipt, but you pay an 18-percent tax on alcohol in Pennsylvania every time you head to the cash register. What was supposed to be a temporary tax to help a struggling city turned into decades of extra money on your alcohol bill.

It all started with the 1936 Johnstown flood. It was devastating, leaving tens of thousands of people homeless. The flood caused widespread damage to the Johnstown area equal to 758-million in today's dollars. The disaster finally forced the state to create flood control measures that still exist to this day, but to pay for that, lawmakers created what was known as the Johnstown Flood Tax.

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The tax was called temporary and charged 10-percent on alcohol. In 1951, temporary changed to permanent, and today, that tax stands at 18-percent. State senator Wayne Langerholc Jr. wants to change that.

"That's why politicians get a bad name," said state senator Langerholc, a Republican representing District 35. "I mean, you never hear of a tax going away. It just increased and got morphed into the general fund."

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There have been repeated failed efforts over the years to repeal the Johnstown tax. What Langerholc wants to do is direct 5.6 percent, about 20 million dollars of the 300 million dollars generated by the tax, to help distressed cities. After all, that's why the tax existed in the first place.

There are 16 cities in Pennsylvania categorized as financially distressed under Act 47. That includes 5 cities in western Pennsylvania: Rankin, Braddock, Duquesne, Aliquippa and New Castle. The money would allow them to pay for critical infrastructure or debt obligations.

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"Our commonwealth is only as strong as our cities," Langerholc said. "If we can get them back into prosperity, enable them to attract new businesses, create new economic development, it's a win not only for the city but for other outlying areas as well."

Langerholc's proposal has not made it through the state legislature in previous years, but he is hoping to make more progress in 2019. The bill has several co-sponsors.

Cox Media Group