Battle over the 'rain tax' in Maryland continues

While Maryland's 10 largest jurisdictions were required  to implement a stormwater fee by July 1  , the battle over the "rain tax" is far from over.

Multiple Maryland jurisdictions have been warned by state agencies that they could face extensive fines for not imposing the fee, which the state says is required by a federal mandate.

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Carroll County was warned by the Maryland Attorney General's Office that it could face up to a $10,000 a day fine for refusing to comply with the mandate. The mandate originated at the state level in 2012 when the General Assembly passed legislation requiring the jurisdictions to establish a plan to begin a watershed protection and restoration project that includes a stormwater remediation fee.

Carroll County believes it complied with the state law by allocating $20 million in existing funds to tackle stormwater remediation projects. Assistant Attorney General Paul N. De Santis wrote to the county that the action they took was insufficient.

"The [Maryland Department of the Environment] believes that the deficiencies in Carroll County's Watershed Protection and Restoration program are serious and we are prepared to file a formal enforcement action to address those deficiencies," De Santis wrote in a letter sent out Oct. 25.

MDE Secretary Robert M. Summers also wrote a similar letter to Frederick County officials, threatening fines of up to $32,000 a day for what he believes is that county's non-compliance with the law. In June, Frederick County passed a 1-cent fee on all property owners, which would generate about $487 a year, according to state estimates.

"We believe that this level of funding will be insufficient to support the people, programs and projects that will be necessary for the county to meet its obligations under the Watershed Implementation Plan and the new MS4 permit that we expect to issue to your county next month," Summers wrote.

Compliance not the issue

Blaine Young, president of the Frederick board of commissioners, called the General Assembly "gutless" for requiring a "tax on rain" while leaving it up to the jurisdictions to set the rate.

Young said that he believes Frederick County is in compliance with the law as there is nothing in the legislation that calls for the fee to be set at a certain rate. He added that his county set aside $3 million to tackle stormwater remediation projects.

"The state is just upset that we outsmarted them," said Young, a Republican. "We believe in ensuring the Chesapeake Bay is clean, we just don't believe we need to place another burden on our residents to do it."

In a year leading up to an election, many lawmakers and candidates have pledged to make the rain tax an issue on the campaign trail. Some state lawmakers have pledged to try and repeal the law, while many on the local level are working to reduce and/or eliminate the fees altogether.

This week, the Anne Arundel County Council voted to lower the stormwater fees for all non-profits to $1 with some pushing to reduce the fees to that rate for all property owners. Currently, homeowners pay between $34 and $170 while businesses pay $85 per 2,940 square feet of impervious space (capped at 25 percent of annual property tax).

Harford County Executive David Craig, a Republican running for governor,  is pushing for his county to repeal its fee  . There, the County Council set its fee to $125 a year for homeowners and $7 per 500 square feet of impervious are for commercial businesses. However, only 10 percent of those fees would be collected in the first year.

Craig said he felt obligated to pass the fees in the summer to be in compliance with the state law, but has maintained his concerns over the legislation, including what projects would be funded and whether they would be beneficial to the environment.

Craig added that he had concerns over the impact the fees would have on local businesses and did not like that government buildings and schools were exempted from paying the fees. He also was upset that only certain jurisdictions were targeted for the fees.

"There have been so many inconsistencies with how the state has implemented this rain tax," Craig said. "This bill was not constructed well and the follow up has been inept.

"I have always supported cleaning up the environment, including setting aside $68 million for agriculture preservation, but the programs need to work. I've also always had issues with unfunded mandates coming from the state."

An election-year issue

In Baltimore County, the County Council approved its fee structure this past spring. Under its plan, townhouse owners pay $21 while single-family homeowners pay $39 annually. In addition, businesses and non-profits will pay $69 and $20, respectively per 2,000 square feet of impervious space.

This has attracted the ire of local Republicans, who have targeted elected officials that supported the legislation at the state and local levels.

"We have issues with raw sewage pouring into our waterways from our treatment plants, and we are already paying a ‘flush' tax to handle that issue," John Fiastro, Baltimore County Republican Central Committee chairman, said. "That seems to be a bigger issue that stormwater runoff."

Fiastro said the fees are also placing a huge undue burden on many small businesses in the area, which will be forced to pass on higher costs onto their customers.

"Squires will be have to sell 176 extra cannolis and the Boulevard Diner will have to sell 553 extra bowls of chicken noodle soup to pay for their fees," said Fiastro, referring to two longtime businesses in Dundalk.

Among those Baltimore County Republicans targeted in their attack against the rain tax was Del. John Olszewski Jr. and his father, Councilman John Olszewski Sr. Fiastro said his organization recently unveiled a billboard, which read, "Who Voted for the Rain Tax?" It listed both Olszewskis as the answer.

The younger Olszewski is running for the District 6 seat in the state senate vacated by the retiring Sen. Norman Stone while the elder Olszewski recently announced he would not be seeking reelection.

Olszewski Jr., a Democrat, said he voted for the implementation of the stormwater fees to ensure Maryland would not be non-compliant with the federal mandate. He said he shares concerns about the implementation of the bill and what he called the undue burden placed on businesses.

"This bill was passed in a way to give county's the ultimate flexibility in how they wished to implement it," Olszewski Jr. said. "It's unfortunate that my opponents have taken this opportunity to try and record cheap political points rather than trying to address the problem.

"My record on taxes speaks for itself. I have opposed increases to the gas tax, sales tax, alcohol tax and the increase in tolls. We didn't have a choice but to pass the stormwater legislation or risk out on securing permits needed to build schools, homes and businesses in the area. When we have businesses like Amazon telling us they want to set up shop in our district and put our people to work, I'm not going to put that at risk."


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