HARRISBURG – Chaired by Senator John Yudichak (I-14), the Senate Community, Economic & Recreational Development Committee took action on a bill today that would direct existing tax dollars toward distressed municipalities in Pennsylvania.
The legislation – Senate Bill 154 – would set aside a portion of what is known as the Johnstown Flood Tax.
Revenues generated from the decades-old alcohol levy would be utilized to assist struggling communities with a new grant program, the Distressed Municipalities Recovery Fund, overseen by the Commonwealth Financing Agency.
“As municipalities combat the COVID-19 pandemic, this is an important time to talk about recovery, and getting our communities back on track,” said Yudichak, who chaired a committee meeting for the first time in his 22-year career in the General Assembly.
“The measure passed by the committee would restore the original intent of the Johnstown Flood Tax, to help our boroughs and cities that need a boost,” said Yudichak.
After the majority vote, the legislation advances to the full Senate for consideration.
Introduced by Senator Wayne Langerholc (R-35), a member of the committee, the measure aims to assist boroughs and cities designated as “financially distressed” under the Municipalities Financial Recovery Act of 1987 (Act 47).
Overall, the legislation would dedicate 5.6 percent of the annual proceeds from the Johnstown Flood Tax to statewide municipalities experiencing severe financial difficulties under the Act 47 program.
The statewide tax, levied on alcoholic beverages, was implemented to help the City of Johnstown recover from the St. Patrick’s Day Flood of 1936, but it was never rescinded. Currently, revenues generated by the tax are allocated to the state’s General Fund.
In the 14th Senatorial District, the city of Nanticoke became the first city in the state to exit Act 47 in 2015. Plymouth Township and West Hazleton Borough have also entered and exited Act 47 status. The city of Hazleton is currently in Act 47.