The so-called rain tax is being debated again — this time in court.
A Montgomery County circuit judge has declared the county's stormwater management fee invalid, saying it violates a state law passed this year to reform the controversial environmental charge. Though the ruling only applies in Montgomery for now, it's creating ripples of anxiety in Baltimore area communities that still levy such fees to pay for reducing the polluted runoff fouling local streams and the Chesapeake Bay.
"My concern is that we may be in a similar situation," said Vincent J. Gardina, director of environmental protection and sustainability in Baltimore County.
Gardina and officials in Baltimore city and Anne Arundel and Howard counties all said they or their lawyers are reviewing the Montgomery decision to see if it raises questions about the legality of their fees.
"I don't know that any of them are different from Montgomery's," said Jim Caldwell, acting director of Howard County's office of sustainability, which manages its stormwater projects.
Hit with an $11,000 stormwater fee, the owner of a 34-acre commercial development in Gaithersburg sued Montgomery County, contending he shouldn't have to pay anything because he had put in ponds that collect all the runoff from his property as well as from neighboring tracts. Judge Nelson W. Rupp Jr. agreed last week, saying the fee should be limited to what it costs the county to treat runoff from the owner's property.
In any case, the judge added, the landowner ought to get a pass if he's taking care of the runoff from his property.
"I think it really can shake the tree," said James L. Thompson, one of the lawyers for Paul N. Chod, whose development firm sued Montgomery County.
If Baltimore city and other localities have fee systems similar to Montgomery's, he said, property owners who feel they're being overcharged could use the same state law to argue for paying less, or nothing at all.
Montgomery County officials are mulling whether to appeal, but view the ruling as applying just to the protesting landowner for now, said spokesman Patrick Lacefield. The county has no plans "at this point" to change its fee structure, he said.
The legal turmoil comes only months after state lawmakers defused a political showdown over stormwater fees by lifting a requirement that Baltimore city and the state's nine largest counties impose them on property owners.
The General Assembly mandated the fees in 2012 as a way to pay for controlling runoff from streets, lawns, parking lots and buildings. Rainfall running off "impervious surfaces" flushes animal waste, fertilizer, dirt and other pollution into storm drains and waterways. It is a significant and growing source of pollution in the bay, and one that state and federal regulators have ordered the 10 localities to reduce.
But the stormwater fees, coming when other taxes and fees were being imposed, sparked a political uproar. Gov. Larry Hogan and other Republicans campaigned on a pledge to repeal the fee mandate, which he and other critics derided as a "rain tax."
The Democrat-controlled General Assembly refused to repeal the fees outright, but left it up to localities to decide how to pay for stormwater projects. Harford County repealed its fee, and Baltimore County cut its by a third. Officials in Anne Arundel and Howard counties discussed and debated, but opted to retain theirs.
The new law did require the localities to prove that they have committed enough funds from whatever source to do all their required stormwater projects.
Lawmakers "grandfathered" Montgomery from the new law, since it had been levying stormwater fees long before they were required. But legislators did specify that Montgomery's fees be set in a way "consistent" with state law, and that is what Chod's lawyers attacked.
They argued that the fees were to reimburse counties for the expense of dealing with runoff from private property, and in this case their client had spent $1 million to carve out two acres of ponds to collect stormwater on his property and from an area twice as large beyond his. The county give Chod a 50 percent credit, halving his bill, but he argued he was still charged too much.
"Our client is a staunch supporter of environmental efforts to protect the Chesapeake Bay," said Diane E. Feuerherd, another of his lawyers, "but to be charged a tax, in addition to what he has already done and continues to do, does not make sense."
Thompson suggested other localities ought to take a hard look at how they assess the fees, and what credits they give for treating stormwater on-site.
"I think it's going to give a wake up call to those folks," he said.
Others are not so sure. Jon Mueller, a lawyer with the Chesapeake Bay Foundation, said he considered the ruling "pretty narrow in scope" because it didn't address the validity of the state law, only how the county had calculated its fees.
Leslie Knapp Jr., legal and policy director for the Maryland Association of Counties, said it's unclear whether the ruling has broader implications, since it hinged on that provision in the new law that applies only to Montgomery County.
But if other courts apply the same logic, he said, it could force those large localities to revise their fee structure and assess charges calculated on a property-by-property basis. And, he added, the ruling also could forbid localities from using the fees to raise money for dealing with stormwater on public property, such as roads, schools or parks.
Halle Van der Gaag, executive director of Blue Water Baltimore, a local watershed watchdog group, said that she believes Montgomery's fee is "very consistent with the intent of the law." And she defended the city's fees, the highest in the state, saying they were designed to account for the "roads and storm drains related to every one of us [that] still need to be maintained and managed."
Caldwell, Gardina and Jeff Raymond, spokesman for Baltimore's Department of Public Works, all said their localities' fees were designed to raise funds for dealing with more than just the runoff coming from private property.
"If you're a property owner in Howard County, Anne Arundel, or Montgomery County, you utilize roads," said Howard's Caldwell.
Howard has to maintain more than $700 million worth of storm drains, detention ponds and other infrastructure, he noted, and is being required to do more. Howard's fee raises about $10 million annually, Caldwell said.
"One way or another, we have to have the money," he said.
Baltimore County, which has cut its fees by a third, still raises $16 million annually for stream restoration and other projects intended to reduce stormwater pollution.
"If we were to reduce it below where we are now, we wouldn't be able to meet our watershed implementation goals," Gardina said.
All the localities give property owners credits for putting in rain gardens, ponds or other measures to collect runoff, but none gives a 100 percent discount. Gardina said that's because even the best stormwater management techniques can't capture all runoff or remove all pollutants.
Del. Kumar P. Barve, a Montgomery County Democrat who is chairman of the House Environment and Transportation Committee, said his panel's lawyers are reviewing the decision.
"It was the intent of the legislature to create an affirmative incentive for businesses to build buildings that didn't cause runoff," he said. So "if you have a property that genuinely doesn't generate stormwater runoff then you probably shouldn't be paying a fee."