'Rain tax' plans to go into effect

Today is the day many Maryland taxpayers have dreaded and many environmentalists have championed.

July 1 marks the deadline the state's nine largest counties and Baltimore City have to establish a plan to begin a watershed protection and restoration project that includes a stormwater remediation fee.

The plans are state-mandated after the Maryland General Assembly passed the law in 2012 requiring the plans, which legislators say is to be in compliance with Environmental Protection Agency requirements. The state Senate passed the bill 33-14 while the House of Delegates approved the measure 91-45.

Commonly called "the rain tax," most area homeowners, businesses, non-profits and religious organizations will now have to pay some kind of fee, which is supposed to be placed in a dedicated fund designed to clean up the Chesapeake Bay and pay for stormwater remediation projects.

What complicates the matter is that the General Assembly left it up to each jurisdiction to establish its own fees and programs with little guidance on what it took to be in compliance with the law. This has led to a broad interpretation of how to implement the fees with some businesses being on the hook for thousands of dollars while at least one county has found a way to what they believe follows the letter of the law without forcing anyone to pay the fee.

"This is an unfunded mandate," said Baltimore City Councilwoman Rochelle "Rikki" Spector. "The state gave us the problem and we were required to come up with a solution. No one is arguing we shouldn't work to clean up the Chesapeake Bay, but this is a fee that is being passed on to many who are already being heavily taxed. Still, we worked closely with all parties involved to develop a plan that addresses the issue."

In Baltimore City, homeowners will pay between $40 and $120 annually while businesses will have their fee capped at no more than 20 percent of their annual property tax. The fees are expected to raise about $30 million annually.

In Baltimore County, townhouse owners will be $21 annually, while single-family homeowners will pay $39. In addition, businesses will pay $69 and non-profits will pay $20, respectively per 2,000 square feet of impervious space.

Many religious and non-profit organizations in the area have grown frustrated with the process and have concerns over how the fees will impact their ability to assist those in need. This includes the Baltimore Jewish Council, which has lobbied several jurisdictions successfully with hopes of lowering the fees.

"We are very supportive of wanting to clean up the Chesapeake Bay and have no problem in doing our fair share," said Cailey Locklair, director of government relations for the BJC. "But those fees will have to come out of existing funds we have in place, which could impact our ability to provide social services that many in our community have come to depend on to help them."

The fees have also led some elected officials to question how their jurisdictions handled the fees and have called for additional action to be taken. This includes Del. Pat  McDonough, a Baltimore County Republican who launched a "Stop the Rain Tax" effort over the weekend.

Also, Del. Steve Schuh, a Republican running for Anne Arundel County Executive, along with Del. Nik Kipke, the House minority leader, recently wrote a letter to Anne Arundel County Executive Laura Neuman urging the county to delay implementing its fee.

"This law was hastily crafted to comply with the l atest unfunded mandate from the Obama administration and passed on by the O'Malley administration," the letter states. "We need to stop this train and start over again. We pledge to work with you to protect taxpayers."

To which, Neuman responded with the following statement:

"While I appreciate Delegate Schuh's concern and interest in the "rain tax," I took immediate action and vetoed the (original) legislation, which was an unfunded state mandate forced on the citizens of Anne Arundel County by Delegate Schuh and the 90 other delegates who voted for House Bill 987. If Delegate Schuh wants to be helpful he should admit he voted for legislation that burdens the taxpayers of Anne Arundel county and convince Gov. O'Malley to call a special session of the General Assembly to fix this flawed legislation." 

Here is a breakdown of how other Baltimore-area jurisdictions handled their stormwater remediation fees:

Anne Arundel County: Townhouses and condominiums will pay $34. Most single-family homes $85. Rural homes $170. Businesses will pay $85 per 2,940 square feet of impervious space (capped at 25 percent of annual property tax). Religious and non-profit organizations would pay $1 annually.

Carroll County: Nothing. The county Board of Commissioners voted to use an existing county fund already allocated for such projects.

Frederick County: Residents, businesses and non-profits will pay just a penny a year.

Harford County:  Homeowners will pay $12.50 in the first year, going up to $125 next year, although property owners can receive a 100 percent credit through wastewater remediation projects. Commercial properties will be charged  $7 per 500 square feet of impervious area. However, like the residential fee, commercial property owners will only have to pay 10 percent in the first year.

Harford County Executive David Craig, a Republican running for governor, is calling for the General Assembly to repeal the fees and start over in its approach for dealing with this issue.

"The wide disparity on how the fees are being implemented just highlights the glaring flaw in this legislation," said Craig campaign spokesman Jim Pettit. "This comes down to impacting jobs and provides another blow to Maryland's business image."

Howard County:  Is working to finalize a streamlined plan where townhouse and condo owners would pay $15 annually, homes on up to a quarter-acre lot would pay $45 and homes on larger lots would pay $90. Businesses and non-profits would pay $15 per $500 square feet of impervious space, although non-profits could develop a remediation plan to receive up to a 100 percent credit. There is also a proposal to cap fees for businesses that prove the fee would provide a hardship.

Howard County Executive Ken Ulman said he decided to simplify the fee structure to make it easy for homeowners to know exactly what they would pay. The plan for that county now is to begin collecting the fees in December.

"Simpler is really better in this case," said Ulman, a Democrat who is running for lieutenant governor alongside Lt. Gov. Anthony Brown. "The idea is to encourage stormwater remediation projects and to clean up the bay. The key to do that is to work together with homeowners, businesses, non-profits and religious groups to come up with the best solution possible."

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