Truth in pricing: Remove a hidden tax from the liquor monopoly

The Johnstown flood tax could be the poster child for why voters don’t trust politicians.

In 1936, after heavy runoff from melting snow and three days of rain led to flooding that caused $50 million in damage, the state instituted what was supposed to be a temporary tax on liquor sales to help rebuild the city.

Well, here we are 80 years later, still collecting that “temporary” 18 percent tax, which did pay for restorative work in Johnstown but has for most of the decades since then gone into the state’s annual operating budget. No wonder voters are suspicious when any taxes are proposed as temporary.

Of course, the flood tax is a double whammy because it also means that any liquor and wine purchased from the state-owned Liquor Control Board stores carries that extra surcharge. There have been numerous efforts to erase the tax from the state’s books, but they don’t have any life this year because of financial constraints.

The folks in Johnstown must get tired of the disingenuous label that makes it look like they’re still benefiting from the “flood tax.” State Rep. Bryan Barbin, a Democrat from that Cambria County town, is among a group of lawmakers who have targeted the misleading tax.

He told the Johnstown Tribune-Democrat that he’d like to see that 18 percent redirected to help cities — not just his own — overcome more recent disasters, economic ones.

But like many forward-thinking proposals in Harrisburg, this one appears to be going nowhere.

The larger need to abolish the government liquor monopoly also went by the wayside, another victim in the political alienation between Democrats and Republicans, which means no reform of public pensions for taxpayers, no fairness in taxing Marcellus Shale drillers and no advancement for Pennsylvania.

Author: Editorial BoardPublication: Pittsburgh Post-Gazettehttp://www.post-gazette.com/opinion/editorials/2016/03/27/Truth-in-pricing-Remove-a-hidden-tax-from-the-liquor-monopoly/stories/201603230036