“Rain Tax” Repeal Won’t Stop Stormwater Spending Mandates
Originally published in the County Times
With competing measures to either repeal or reform the state’s stormwater management fee — more commonly known as the “rain tax” — making their way through the Annapolis legislature one thing that will not change is the federal mandate that the counties still find ways to pay for pollution control measures aimed at cleaning up the Chesapeake
Bay Watershed.
Gov. Larry Hogan has come out with a bill to repeal the requirement that counties impose the tax entirely while Senate President Thomas V. “Mike” Miller’s bill would take away the mandate as well but would make counties ensure they have a plan to pay for the federal pollution control mandates.
An economist from the Maryland Public Policy Institute (MPPI), though, says that even if either measure passes it might not change much in the real world.
“The federal mandate is statewide,” said John Walters of the MPPI think tank. “The bottom line is some money is going to be spent on curbing pollution.
“There are some things that are disingenuous about the repeal effort.”
The problems that exist with any kind of reform or repeal effort are these, Walters said.
First there is no guarantee that with a repeal or reform that counties will actually choose to rescind the stormwater fees they already have in place.
St. Mary’s County currently has no stormwater management fee but it is in line to have one due to its population nearing or exceeding 100,000 residents.
If neither bill passes in the legislature this year the “rain tax” will still be in effect in 10 jurisdictions.
Despite its being unpopular as a draconion revenue measure, the rain tax has raised about $110 million each year since its inception in 2012.
That money has been redistributed to the 10 jurisdictions that enacted the tax to pay for stormwater management projects.
“Once the government is used to a revenue stream they’re usually loathe to give it up,” Walters said. “Even if you repeal the bill that started [the rain tax] there’s no guarantee that the counties will repeal their fees because they probably want the revenue.”
Still there are positive aspects to moving the rain tax down to the control of counties, Walters said, especially since the state government has in the past made a pasttime of raiding certain funds to balance the operating budget against recurring revenue shortfalls.
Pushing that funding mandate to the counties could ensure that the pollution control money is used for what it was intended.
“That’s definitely an advantage,” Walters said. “It’s an interesting, sticky situation. I think some counties may keep it.”
In an analysis of the current rain tax Walters completed for the MPPI the counties could retain portions of the
$110 million, if there was a repeal that would have been collected but the state as a whole could face the possibility of many stormwater management projects going by the way side.
“Without that revenue, Gov. Hogan and county leaders would have to choose between letting local stormwater remediation projects — mandated by federal regulation — go unfunded or finding the money to pay for the projects in already tight state and local budgets,” Walters wrote in his Feb. 20 analysis.
County budgets are tight, to be sure said Commissioner Todd Morgan, and no matter which bill passes to reform the tax or repeal it outright counties will likely face the fact that they will have to deal with the cost burden on their own.
The rain tax is not the only thing that the county has to worry about either, Morgan said.
“Let’s not forget we’ve got the WIP out there,” Morgan said of the state’s Watershed Implementation Plan that sets stringent controls on sediment, nitrogen and phosphorus going into the watershed aside from the rain tax. “This [rain tax reform] could be an unfunded mandate put down on us.
“Every county is going to have to find a way to deal with it. There’s no help from the feds.”
Commissioner Tom Jarboe said that the WIP on its own could cost hundreds of millions of dollars aside from any revenue collected from a rain tax. Either or both would have a dampening effect on economic growth here.
“It will cost us millions of millions of dollars, people just can’t follow through,” Jarboe said. “It stops us from moving forward with economic development because we have to keep up with mandates from up on high.”
Jarboe said rain tax reforms would likely only delay the inevitable.
“If anything it’s a delay of game,” Jarboe said. “It’s probably more political than it is substantive.”
guyleonard@countytimes.net


