A proposed tax on alcoholic drinks could give new meaning to the phrase "drinking away your problems" by funneling new revenue toward municipalities in financial distress.
The "Optional Distressed Municipality Alcohol Consumption Tax" is one of three new levies in the proposed legislation from the Local Government Commission Act 47 Task Force, which is working through an update to the state's designation for fiscally distressed municipalities.
The task force's recommended legislation, which could be introduced in the General Assembly as early as this fall, aims to create an exit strategy. It creates a five-year limitation for Act 47 designees, followed by an optional three-year exit plan. In the meantime, the idea is local governments could fix their finances with new revenue options, such as a drink tax.
"Each municipality is really going to have to analyze what is best for them," said co-chair Rep. Chris Ross, R-Chester. "We're trying to apply this to a variety of different municipalities in very different circumstances, from very small boroughs to very large cities."
Act 47 is something of a black hole. Since Pennsylvania enacted the program in 1987, 26 municipalities have received the designation. Six have emerged. But the situations that landed them on that list in the first place vary. Some may not be able to balance their annual budgets, some may have crushing debt obligations and still others may have seen their tax bases erode after years of economic stagnation.