From State Sen. J.B. Jennings:
Governor Larry Hogan Introduces Legislation To Repeal “Rain Tax”
Governor Larry Hogan held a press conference on Tuesday announcing his legislation to repeal the “rain tax”. This repeal will instead give local governments control of how they will pay for the stormwater management mandate.
Maryland’s legislature passed the rain tax in 2012 in order to fund a federally mandated stormwater management program. The program aims to curb the environmental impact of stormwater runoff, which carries contaminants such as motor oil and pesticides into the Bay and its tributaries. The goal is to reduce pollution enough by 2025 so that the Chesapeake Bay can be taken off the nation’s list of impaired waterways. Maryland’s share of the bill to fund these remediation projects will cost the state upwards of $14.8 billion.
Maryland has taken a page from the federal government’s playbook and forced this unfunded mandate on the state’s ten most populous jurisdictions, including Baltimore and Harford Counties. To pay for the projects, the designated jurisdictions must impose a tax based on the square footage of residential and commercial land covered by impervious surfaces, which cannot absorb water. Impervious surfaces include parking lots, roofs, driveways, and pavements. Arguments were made to give the local governments the option to choose how they would pay for this fee; however, in the end the legislature voted to make the rain tax mandatory.
As long as the federal stormwater mandates exist, the states in the Chesapeake Bay watershed will have to pay for them or face massive fines for violating the Clean Water Act. The Governor intends to repeal the state requirement that the affected jurisdictions tax their citizens to raise the revenue and instead give them the freedom to develop their own plan for funding the projects. Even so, the Governor alone cannot relieve the counties of their responsibility under federal law, to pay for these stormwater management projects.
Carroll and Frederick Counties refused to impose a rain tax and have come up with a plan to fund the mandate from within their counties’ existing budget structure. Baltimore County Executive Kevin Kamenetz, once an enthusiastic supporter of the rain tax, recently announced that he wants to cut the tax by one-third. Under his plan, the tax on a single-family home would be lowered from $69 to $26 annually, townhouse owners would see an annual decrease from $21 to $14, and the tax rate for business owners per 2,000 square feet of impervious surfaces would drop from $69 to $46. Harford County officials are also considering meeting stormwater goals by dedicating existing revenue to pay for the projects.
Maryland is the only state in the Chesapeake Bay watershed that decided to tax impervious surfaces to raise the necessary revenue for the federal stormwater management projects. This rain tax has damaged the economy because it forces businesses to pay yet another tax—one that, in some cases, is larger even than their property taxes. The rain tax has the potential to transform Maryland from a business-unfriendly state to a business-hostile state. Therefore, I support the effort to allow each jurisdiction to decide for itself a plan to raise the funds for stormwater management projects and do their share to clean up the Chesapeake Bay.
Please do not hesitate to contact me on this or any other issue of concern to you. Remember, your input is important to me. I encourage and welcome your input.
Senator J.B. Jennings