|Rain is harmless! Why tax it?|
Photo by Gerritt Carver,
U. of South Alabama
A particular fight continues to brew as Governor Hogan (R) settles into office, centered on Maryland's stormwater utility program requirement (HB 987), passed in 2012. That law requires Maryland's 9 largest counties (and Baltimore City) to implement a specific funding "tool" (aka tax) to fund runoff reduction projects. As those county taxes went into effect in 2014, election-year Republicans pounced, calling them "the rain tax," even though the fees are based on impervious runoff, not the amount of rain. And now that people are hearing about this Rain Tax (typically about $40/year in America's most affluent state), they are mad as hell. And they ain't gonna take it anymore! Except they are.
To understand why this cost to taxpayers isn't going away, let's start from a standpoint of basic civics here.
- In 1972, the (federal) Clean Water Act (CWA) went into effect, requiring the EPA to clean up all of America's waterways by 1984 at the latest.
- CWA gives EPA a particular tool, called the TMDL (total maximum daily load) to regulate private and government discharges of pollutants into water. The TMDL is basically a pollution "diet," and when exceeded, the health of the waterway suffers (based on actual science).
- EPA successfully (on a weekly basis) fines municipalities, counties, states, and private companies for violating TMDLs already put in place.
- EPA is overseeing nearly 75,000 TMDL programs nationwide.
- The TMDL can be levied upon any EPA permittee (including states and counties).
- In December 2010, EPA passed the Chesapeake Bay TMDL, requiring the Bay's six states to clean up all waters connected to the Chesapeake Bay by 2025.
- In 2012, EPA opponents failed to derail the Chesapeake TMDL in federal court.
In 2011, Maryland's Democratic legislature tried to levy a statewide stormwater fee (or "rain tax"), and fell immediately under attack from conservative rural counties who claimed, "We don't have the pavement, don't tax us." So in 2012, the legislature passed HB897, requiring all urban/suburban counties with a joint EPA/MDE municipal stormwater (MS4) permit (9 counties plus Baltimore City) to implement a program to raise their own fees. Was this based on science (more citizens = more pavement = more runoff) or political expediency (existing MS4 permit vehicle to act as the hammer - a compliance law didn't need to be created separately)? That's a good question. Maybe that matters and maybe that doesn't.
But...back to "Repeal the Rain Tax!" What will the impact be?
- Maryland residents will save, on average, $39/year on their tax bill from 2015-2018.
- County governments will reneg on hundreds of millions of dollars of multi-year stormwater abatement contracts, costing taxpayers (arguably) more than the fee itself (tax bill will increase).
- In 2016, Maryland will not meet its two-year EPA milestones for the TMDL
- In 2018, Maryland will not meet its two-year EPA milestones for the TMDL (or the 2016 milestones)
- In early 2019, EPA will prohibit MDE from issuing MS4 permits, meaning that during the year's first rainstorm, each county will be cited for millions of dollars in federal fines for polluting federal waters. A federal court case will ensue.
- In 2020, Maryland will not meet its five-year EPA milestones for the TMDL (or the 2016 or 2018 milestones).
- In 2020, the federal case will go to court, and EPA will enter into separate arbitrations, called "Federal Consent Decrees" with MDE and the individual counties with MS4 permits.
- Each consent decree will lay out the period (2020-2025) for the County to comply with the TMDL, as previously required.
- Counties will sign the consent decrees to obtain their new MS4 permits.
- A new tax (or tax increase) will be levied upon taxpayers to comply with the now-imminent Chesapeake Bay TMDL.
- Maryland residents will spend, on average, $400-$600/year on their tax bill to fund 10 years of projects within the last five years of the federal TMDL timeline, as inflation has carried the cost of labor and materials to their highest point since before the 2008 recession.
|Bay Cleanup Prior to TMDL (red = none)|
Image: Chesapeake Bay Foundation
Maryland, at over $70,000 median household income, is America's wealthiest state. In short, keeping the stormwater fee (or similar tax) in place until 2025 will cost the average taxpayer approximately $400.00 (2015-2025) .
Repealing the stormwater fee (or its associated state mandate) will cost the average taxpayer $3,000.00 (2020-2025).
From a standpoint of moral obligation, cleaning up the water that we and our ancestors polluted for profit seems like a basic concept. From a standpoint of fiscal discipline, cleaning up those waters is now a non-decision as a result of the Chesapeake Bay TMDL. I encourage you to do some basic reading on the topic. We've - you and I - bought this cost through 400 years of cheap food, cheap land, and a landscape of highways, which were cheap to build through the woods. Now the water - water which we need to live - is sick, and we have to fix it. Admirable though it is to continue to pass the burden of cost and duty down to our children while we enjoy the benefits, it's pretty clear that the time has come to do something different.