We in Allegheny County have become familiar with using an alcoholic drink tax to fund mass transit, but would the state raise a glass to offset tax-exempt property?

The tax on wine and spirits (besides the sales tax you pay when you buy a bottle) is 18% and built into the markup (the PA Dept of Revenue notes “All liquors sold by the LCB are subject to this 18 percent tax, which is calculated on the price paid by the consumer including mark-up, handling charge and federal tax”) and is known as the “Johnstown Flood Tax” and was intended to be temporary.

That “temporary” tax goes to the state’s general fund, but a proposal that might seem like ages ago in policy terms (2008) might revive the idea to direct the proceeds of the tax to municipalities that host a certain percentage of tax-exempt property.  As an LBFC report noted a year after the original proposal, two states provide payments to local government to offset the presence of hospitals and universities.  A handful of others make specific payments for certain types of exempt property, and PA does make payments to municipalities hosting forested game lands.

Obviously questions arise about the formula of distributing the money, replacing the liquor tax money if it is removed from the general fund, if government owned property would figure into the calculation, etc.