HARRISBURG --Another effort is underway to financially compensate cities and towns that have a lot of tax-exempt property within their borders.

The Pennsylvania League of Cities and Municipalities, the Pennsylvania State Association of Township Commissioners and the State Association of Boroughs rallied at the Capitol today for House Bill 2018, which would compensate towns for the loss of revenue from tax-exempt property by using the $240 million generated annually by the so-called Johnstown Flood Tax.

It was enacted in 1936 to help Johnstown recover from a devastating flood, but the Legislature has never removed it.

Rep. Bob Freeman, D-Northampton, and others, including Rep. Dan Frankel, D-Squirrel Hill, want to use the flood-tax revenues to compensate communities where tax-exempt properties exceed 15 percent of the total assessed value of all properties.

This would include Pittsburgh, where about 35 percent of the property is non-taxable; Easton, where Mr. Freeman is from, at 27 percent; Harrisburg, at 48 percent, and Gettysburg, at a whopping 80 percent, because of the Civil War battlefield.

Not compensating towns for the loss of taxable revenue puts a strain on local taxpayers and "is fundamentally wrong,'' Mr. Freeman said. "We need to address it.''

But his idea would blow a $240 million hole in the $28 billion state budget, and is expected to face strong opposition because some legislators don't want to increase other taxes to make up for the loss of the Johnstown Flood Tax money.