A city councilwoman is challenging Baltimore's plan to charge businesses some of the highest stormwater fees in the state — and divert some of the money that had gone to Chesapeake Bay cleanup to help fund property tax cuts.
Councilwoman Mary Pat Clarke says the Rawlings-Blake administration's stormwater plan would create a financial hardship for many local businesses. And Clarke and environmental groups object to raising revenue intended for pollution abatement to help pay for property tax relief.
"With all due respect, that's really not the purpose of the fund," Clarke said.
Clarke, vice chairwoman of the committee considering the mayor's stormwater proposal, has introduced amendments that would phase in the fees — decreasing the charges for businesses by about 45 percent in the first year.
She says she's concerned that some businesses would otherwise have to pay tens of thousands of dollars and could be forced to lay off workers or move out of the city. To replace the money the city wouldn't collect from stormwater fees, Clarke has proposed about $12 million in budget cuts primarily to administrative and street-sweeping costs.
"We're dealing with a fee that, in some quarters, is of grave concern," Clarke said. "I'm extremely concerned that we stay comparable with other jurisdictions."
Stormwater fees — often pilloried as a "rain tax" — have been the subject of public debate in recent weeks. On the last day of the General Assembly session, some state legislators tried to postpone the entire program. Anne Arundel County Executive Laura Neuman vetoed her county's fee plan, only to have her decision overridden by the county council last week. Some Carroll County commissioners have said they are against creating a fee as well.
At issue is money to combat the pollution that comes from rainwater when it streams off buildings, pavement and roads. The water picks up pollutants from sewage, animal feces and other sources as it heads into waterways that flow into the Bay.
Maryland lawmakers last year passed legislation requiring 10 local governments, including Baltimore City and Baltimore, Howard, Anne Arundel, Carroll and Harford counties, to establish a stormwater program with dedicated fees by July 1.
The fees are meant to fund efforts such as planting trees along streams to soak up runoff or creating wetlands that capture the bay-fouling nutrients in the water. The fees also would pay for restoring streams degraded by development-induced erosion.
The law gives localities the flexibility to set their own rates.
Many local governments are basing fees on the amount of "impervious" surface — such as roofs, driveways and parking lots. The fees would be included in water or property tax bills or new stormwater bills.
Under the Rawlings-Blake administration's plan, single-family homes would be charged $48 to $144 a year, while larger properties would have to pay $72 per 1,050 square feet per year.
Some criticism in Baltimore has centered on the city's plan to use a portion of the money raised by the fees to help pay for tax cuts.
Baltimore currently spends about $10 million in general funds on stormwater management. The administration's new stormwater fee would raise $28 million next fiscal year. Instead of adding that to the $10 million, the city would take about $6.7 million of the general fund money and use it to help pay for property tax cuts, officials said.
The city's budget director, Andrew W. Kleine, emphasized the city's long-term $750 million structural deficit and the need to improve city finances while bolstering stormwater infrastructure.
"The whole concept of a utility is to pay for a service," he said. "To say we should continue to fund these services from the general fund, given the serious funding issues we have, to me that doesn't make a lot of sense."
Rawlings-Blake has said that by raising more money from nonprofits and companies, the city can lower property taxe rates and attract more people to live in Baltimore.
But the state law requiring municipalities to begin charging a stormwater fee says the money collected should be added to any money already being spent for the purpose.
"The funds disbursed under this subsection are intended to be in addition to any existing state or local expenditures for stormwater management," the law states. "Money in a local watershed and restoration fund may not revert or be transferred to the general fund of any county or municipality."
Kleine said city lawyers analyzed the language in the law and determined the plan does not violate the law.
"Our lawyers don't read that as a requirement," he said.
Claudia Friedetzky, of the Sierra Club's Maryland chapter, questioned the city's strategy. "The money is supposed to be used to meet a federal mandate," she said. "I would question why they wouldn't use all the money they could for stormwater management."
Halle Van der Gaag, executive director of the local environmental group Blue Water Baltimore, said she understands the mayor's desire to lower property taxes, but doesn't want the city to undermine the effort to reduce stormwater pollution.
"I'm a resident — I want to see my property tax reduced," Van der Gaag said. But she said the proposed stormwater fee that some are complaining about wouldn't need to be so high if it were added to the $10 million currently being spent.
City Council President Bernard C. "Jack" Young said he is concerned that Baltimore's fees are three times as large as some other jurisdictions. Baltimore County has offered businesses up to a 80 percent credit for the fees, he said, while Anne Arundel County has capped the fees at no more than 20 percent of an organization's property tax.
"That's a concern of mine," Young said of the fees the mayor has proposed. "We're looking at trying to see how we can lower the fees and how we can phase them in."
Many see wisdom in the mayor's plan, however.
Sen. Verna L. Jones-Rodwell, a Baltimore Democrat and a member of the Senate Budget and Taxation Committee, supports the move.
"We have the highest property tax rate in the state, and it is very burdensome to property owners and it is a deterrent for people moving back into the city," Jones-Rodwell said. "I think the mayor is making a prudent decision."
City Councilman Robert W. Curran said he backs the mayor's plan, citing in particular a need for nonprofits to contribute more to city coffers. "I'm not going to be a part of any mitigation of stormwater fees for nonprofits," he said. "Nonprofits need to belly up to the table."
Van der Gaag, of Blue Water Baltimore, said additional funds are needed because the city's network of underground storm sewers has not been kept up over the years. She pointed out the sinkhole that shut down part of Monument Street in August as evidence of the city's crumbling infrastructure.
"We have the most impervious surface of any jurisdiction in the state. We were built before there was any stormwater management," she said. "You can't change that just because you don't want to pay the fee."
Clarke's amendments would phase in the fees for the first three years and then allow the Board of Estimates to set the rates. Anne Arundel is considering a similar phase-in and a cap that would mean the government couldn't charge a business any more than 25 percent of its property tax bill.
City Councilman Bill Henry, like Clarke and Curran a member of the committee considering the issue, said the panel will continue to hold work sessions. He said he believes the council will be able to pass a fee bill by July 1.
"It wouldn't surprise me if we ended up with a compromise," he said.
Reporters Yvonne Wenger and Timothy B. Wheeler contributed to this article.
Fees around the region
Around the Baltimore region, officials have taken varying approaches to the stormwater fee required by state law.
•In Baltimore City, under the administration's plan, single-family homes would be charged $48 to $144 a year, while larger properties would have to pay $72 per 1,050 square feet per year.
•Baltimore County has approved charging homeowners $18 to $36 a year. Businesses face much higher fees. An apartment complex with 127,680 square feet of impervious surface on a 5-acre lot could be charged about $4,400 a year. A shopping mall could be charged more than $30,000. But owners of commercial properties could get credits for up to 80 percent of the fee if they have taken enough steps to manage stormwater runoff.
•Harford County passed a flat fee of $125 year for residential properties and a fee of $7 per 500 square feet of impervious area of commercial, industrial and apartment structures. However, residents and business owners are required to pay only 10 percent of the rates over the next year.
•The Howard County Council, in a divided vote, approved a plan under which the average residential property owner will be charged about $105 annually. Both commercial and residential property owners will be charged $15 per 500 square feet of impervious surface. A property owner with 7,000 square feet of impervious surface can expect to pay $210 a year.
•Anne Arundel County has proposed a fee of $34 per year for owners of townhouses and condominiums, $85 for single-family homes and $170 for homes in rural and agricultural areas. The bill, which could be changed, would require nonresidential properties, including businesses and churches, to pay about $1,323 per impervious acre per year.
•In Carroll County, officials have yet to propose a fee schedule.