Part of '36 flood tax legislation acceptable, big part of it isn't
When it was enacted by the Pennsylvania Legislature after the Johnstown Flood of 1936, the so-called Johnstown Flood Tax was intended to be a temporary levy to help the city recover from the St. Patrick's Day disaster spawned by heavy rains that quickly melted deep snow in the surrounding hills.
But the good intention of repealing the tax once the recovery work was completed — about 70 years ago — never happened. Instead, the original 10 percent levy on liquor was, over the years, increased twice and now stands at 18 percent on wine and liquor.
The $270 million a year that the tax now generates goes directly into the state's general fund — contrary to the tax's original intent.
The existence of the tax is testimony to state government's reluctance to part with a source of revenue, even if the original justification for that revenue no longer exists.
But regarding the Johnstown Flood Tax, there is hope, although it's premature to get too excited about it because of the commonwealth's ongoing dire budget circumstances.
What's happening regarding the flood tax is this:
State Rep. Bryan Barbin, D-Johns-town, has introduced legislation that would require some of the flood tax money to be directed toward the type of work for which it originally was intended, while also setting a timetable for the tax's repeal.
Instead of the flood tax revenue being allocated for general purposes, Barbin's legislation stipulates that, until the tax is repealed in 2021, which his bill would require, some of the money collected would be directed to battle urban blight across the state.
While that would be a worthy use for the money, another aspect of Barbin's proposal is unacceptable. That is the part stipulating that some of the flood tax revenue be used to counter the troubling consequences of the legislature's 2001 pension grab.
While boosting lawmakers' pensions by 50 percent in 2001, the General Assembly also upped public school teachers' pensions by 25 percent, setting the stage for a funding morass projected to heavily impact state residents' property tax bills — in a bad way — in about two years.
The state Legislature needs to find a way to lessen the ill effects of its unconscionable 2001 action, which was carried out in a way that avoided public understanding at the time. But it should not do so by siphoning off money originally targeted for worthy efforts and using it instead to pay to fix a problem that never should have been allowed to threaten state residents' financial well-being.
The Legislature should impose savings in day-to-day state operations to find the money that Barbin envisions using from the flood tax to soften the pension debacle.
However, it would come as no surprise if Barbin's legislation failed to gain much support, considering the state's current financial difficulties.
From the perspective of many lawmakers, the state shouldn't be reducing its revenue sources during economic times like these.
Nevertheless, Barbin deserves praise for at least trying to put some of the flood tax money to better use, rather than having it going into the General Fund for whatever.
"I think it is time to revert this tax back to its original purpose and help local governments and programs that are facing the imminent threat of bottoming out," Barbin said.
But he shouldn't be trying to use money that could accomplish worthy work to provide cover for the pension benefits irresponsibility that preceded his election to the Legislature.
There have been a lot of inappropriate goings-on and misspending of money in the General Assembly — the current Bonusgate criminal investigation being a prominent example of what's not been right.
It's time that lawmakers pay a price for the unconscionable actions that have been contrary to the interests of the commonwealth and its people. The flood tax should not be used to help some politicians escape the punishment — defeat at the polls — that they deserve.