Despite facing a bigger-than-expected budget shortfall, and although he promised a policy blackout until he takes office, Governor-elect Larry Hogan last week publicly reiterated his support for repealing Maryland's "rain tax" while meeting with fellow Republican governors in Florida. He told The Washington Post that while "it was not the biggest or the worst tax," it was the one "people had the largest reaction to, and we are going to repeal it."
Now, setting aside the fact that exactly what constitutes a "repeal" of what is more accurately described as the stormwater remediation fee is unclear (and more about that later), Mr. Hogan has essentially acknowledged that the anti-rain tax crusade he and many of his fellow Republicans have pursued has been a bit trumped up. For the typical Baltimore County homeowner, for instance, it costs all of $39 a year. It's imposed by local governments, not the state, applies only to Baltimore City and nine counties and it's used to finance stormwater projects that are mandated by the federal government and help to clean up the Chesapeake Bay, not to mention protect vulnerable communities from flooding, erosion, aging infrastructure or fouled drinking water supplies. And, no, it is not actually a tax on rain.
But wait, the whole "rain tax" debate has been even more misleading than that. Some counties have complained that they can finance these projects without imposing a new fee. As it happens, the Maryland Department of the Environment (with approval from the General Assembly in the last state budget) has already offered some flexibility to jurisdictions to do just that. People who live in Carroll County, for instance, don't pay a "rain tax" at all because the county is willing to use property tax dollars for the purpose instead.
If by "repeal," Mr. Hogan actually means he would like the state legislature to no longer make the fee mandatory in those 10 subdivisions where it can currently be applied, he's probably not going to get much argument from lawmakers. They've essentially already agreed that local governments should have that flexibility. If by "repeal," he means that he's no longer going to require the remediation projects the fee finances, well, sorry, but the governor and legislature don't have that authority — that's in the hands of the U.S. Environmental Protection Agency.
Indeed, that's been the whole point from Day One. Maryland has to reduce polluted run-off or face sanctions under the Clean Water Act. Counties that are so anxious to stop charging a fee for that purpose are taking a big risk. Failing to meet those EPA pollution standards could prove costly, and penalties could include hefty fines or even a moratorium on new construction. And on a practical level, the loss of revenue will put pressure on local governments to raise property taxes or cut funding to school construction and repair or other big ticket items to make room for stormwater projects in their capital budgets.
Finally, if by "repeal," Mr. Hogan means that he wants to repeal the remediation fee entirely and withdraw local governments' authority to charge it, he's probably in for a fight. There's little incentive for lawmakers in Baltimore City or Montgomery and Prince George's counties to go along, and that makes such a measure essentially DOA in the House of Delegates. Baltimore and Prince George's need the money to pay for projects from street sweeping to fixing broken drainage systems, while Montgomery County actually started charging property owners for stormwater remediation before the state even mandated a separate fee. Why would they change their minds now?