Repealing the Rain Tax: Easier Said than Done

John J. Walters Mar 10, 2015

Governor Hogan was vocal during his campaign that he wanted to repeal the rain tax. True to his word, he quickly introduced legislation to do just that. And—almost with equal speed—the bill was rejected by the House Environment and Transportation Committee.

But anti-rain tax residents need not lose hope. There is another. Senate President Mike Miller also introduced legislation aimed at repealing the rain tax that may be successful, as it requires that counties demonstrate how they would meet federal pollution guidelines in the absence of rain tax revenue.

The provision that counties come up with an alternate strategy for mitigating pollution caused by rainwater draining from impervious surfaces in residential and commercial areas illustrates exactly why repealing the rain tax is no simple matter.

Guy Leonard of the St. Mary’s County Times summed up the obstacles in the way of the “repeal” of the rain tax in his article on page 14 of the March 5th edition. In brief: the whole reason the rain tax exists is to raise revenue to help the state meet some rather difficult requirements handed down from the EPA. If we don’t raise new revenue, we’ll have to find ways to pay for this out of existing funds—and we’re in a tight spot financially already.

The bill that started it all doesn’t even actually set the tax rates that any of the ten counties are assessing. It’s simply a mandate that they do something. Frederick County, for example, refuses to play ball—but other counties have already raised a couple hundred million dollars.

Even if we remove the requirement that counties implement a rain tax, there’s no guarantee that all counties will suddenly decide to stop collecting it. In fact, even a county that wasn’t initially required to create such a tax would still be free to start one now or down the road.

The rain tax was last administration’s response to a pollution problem. It’s one solution to that problem, but it is by no means the only one—nor is it a complete or perfect one. Governor Hogan is right to call it into question, as I wrote in my latest report for the Maryland Public Policy Institute.

However, repealing the rain tax is only one part of a larger discussion that our legislators need to have about pollution in the Chesapeake Bay.

If we are to repeal the rain tax, we need to figure out how to fund cleanup efforts without that revenue. In my report, I identify some possible ways to do this without raising taxes, but they will require a fiscal discipline that O’Malley administration seemed to lack.

We’ll also need to conduct some more research into what the most effective ways to combat Bay pollution really are. While it may seem intuitive that stormwater drains are a major source of pollution, research suggests that there are some larger contributors that are being completely ignored.

The rain tax isn’t something that we’ll simply be able to repeal and forget about. It’s one piece of complicated (and expensive) puzzle that the state will be attempting to solve for the next decade as they try to comply with EPA standards. Long after it has faded from the spotlight, the issue will still remain.