Monday, April 22, 2013

Maryland's "Rain Tax"

            Starting on July 1st, 2013, ten Maryland counties will begin collecting a so-called “rain-tax” from its residents and businesses. Officially, the tax is called a “stormwater remediation fee” and will be assessed based on the amount of impervious surfaces, such as roofs, driveways, and parking lots, that a parcel of land contains. The rain tax in Maryland is being implemented as a means to fulfill the requirement, set by the EPA in 2010, to reduce stormwater runoff to the Chesapeake Bay such that nitrogen and phosphorus levels fall by 22% and 15% respectively by 2025. The estimated cost for Maryland to meet these requirements is $14.8 billion. This particular effort to reduce nutrients to the Chesapeake Bay is not federally funded, and, therefore the state (i.e. thetaxpayers) must pay the cost.
            The counties applying the tax include Anne Arundel, Baltimore, Carroll, Charles, Fredrick, Harford, Howard, Montgomery, and Prince George’s counties, as well as Baltimore City. The fees will be assessed on the county level and can consist of flat rate fees or graduated rate fees determined by impervious surface cover, via analysis of satellite imagery. For example, under Baltimore County’s plan, single-family homes would pay $39 annually, townhomes would pay $21, and condos would pay $32. Under Baltimore City’s plan, single-family residentially zoned properties would pay a flat annual rate of $48, $72, or $144 based on the level of imperviousness and commercial and industrial zoned properties would pay $72 per 1,050 square feet of impervious area. These fees may be reduced based on a set of guidelines and requirements, also set by the counties, and would largely apply to non-profit organizations. It is also noted that government-owned property will be exempt from the tax.  Monies generated by this tax will go towards stormwater management costs, stream and wetland restoration projects, and community education and outreach.
            I like the idea of reducing nutrient pollution in the Chesapeake Bay and realize that to do this, requires substantial amounts of money. According to the Chesapeake Bay Foundation, the largest source of nitrogen and phosphorous pollution to the Chesapeake Bay comes from the agriculture sector at about 38%; sewage and septic combine to account for roughly 23%, air pollution accounts for 21%, and stormwater accounts for 16%. However, I feel that the amount of ‘pollution costs’ that these different sectors pay might be disproportionate to their level of accountability. For example, Maryland currently charges $30 annually for sewer pollution (which accounts for 19% if separated from septic) yet pollution in stormwater off of (not from) impervious surfaces can cost a homeowner upwards of $100 annually? Additionally, I know that the agriculture sector must comply with nutrient management regulations but can receive government subsidies generated from state general obligation bonds (mostly property taxes), up to 87.5 % of the cost to do so.
--April Dunn

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