Pa. looks at new tax on alcoholic drinks to raise funds for distressed cities

    Proposed revisions to Pennsylvania’s program for fiscally distressed municipalities could include a levy on what goes on at the bar.

    Local governments admitted into the state’s Act 47 program to stabilize their finances already are allowed to raise income taxes.

    But a state task force studying Act 47 likely will recommend that lawmakers approve a new menu of tax alternatives — including as much as a 10 percent tax on the sale of alcoholic drinks and six-packs.

    The drink tax option is meant to help cities that might otherwise have to raise taxes that damage the business climate, according to Sen. John Eichelberger, panel co-chairman.

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    “They may lose businesses over it, they may prohibit other businesses from moving in, based on what they do during that time period,” said Eichelberger, R-Blair. “And we wanted to make sure that didn’t happen. So this is an attempt to keep the business environment viable.”

    Other proposed changes to the roughly 25-year-old program include mapping a clearly-defined way out.

    Officials have long criticized Act 47 for leaving troubled local governments to languish. Twenty-seven municipalities have entered, but only six have left the program.

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