A House of Delegates committee was right last week to reject Gov. Larry Hogan's plan to repeal the so-called "rain tax," and a brewing debate in Anne Arundel County shows why.
Although the requirement that Maryland's 10 largest jurisdictions impose stormwater remediation fees remains on the books, three counties have found a way around it. They are still required to meet federal Environmental Protection Agency targets for reducing stormwater pollution, but Carroll, Frederick and Harford counties have taken steps to pay for the associated mitigation projects without a dedicated fee. (Frederick charges property owners a penny a year, Carroll never established a fee, and Harford just repealed it.) The Maryland Department of the Environment under Gov. Martin O'Malley allowed Carroll and Frederick to avoid the fees so long as they funded the mitigation projects through other means. Though we think it wiser to have a dedicated fee to pay for the stormwater mitigation projects rather than take the risk that they will crowd out other important priorities, those counties' leaders have determined that they have the financial wherewithal and flexibility to meet the federal requirements with existing resources.
But not all counties are in that position. During a recent meeting with The Sun's editorial board, Prince George's County Executive Rushern Baker said he would not pursue a repeal of his county's stormwater fee no matter what becomes of Governor Hogan's legislation. Because of that county's strict property tax cap, it would have no way of meeting its federal obligations without either charging a stormwater fee or gutting other top priorities like public education.
If any other county is in the same boat, you'd think it would be Anne Arundel. Not only does it have strict property tax caps, but it also has the highest projected costs for stormwater mitigation projects of any county in the state — about $464 million over five years, or more than 20 percent of the state-wide total — because of its degree of urbanization and its extensive shoreline. Consequently, County Executive Steve Schuh, a Republican who voted for the stormwater fee when he was in the House of Delegates, did not initially make a push to reduce or eliminate the county's fee, preferring instead to pursue a moderate property tax reduction. When asked, he said he didn't believe he could get the county council to vote for a repeal. But something changed, and last month, he threw his weight behind a plan to phase out Arundel's fee over three years, saying he could do so without jeopardizing the county's spending on stormwater mitigation.
That's not how the county's auditor sees it. In a recent email sent to county officials, Auditor Teresa Sutherland wrote that she could "see no way you can significantly reduce or repeal the watershed protection and restoration fee (WPRF tax) and continue to fund $75-80 million of WPRF projects a year within our existing General Fund revenues." The county's borrowing is already maxed out, she said, and the only ways to fund the current level of stormwater mitigation projects without a dedicated fee are "(1) modify our debt affordability guidelines, which likely would jeopardize our AAA bond rating; (2) forgo $75 million of other projects every year that are already programmed in our six-year capital program (schools, roads, libraries, parks, etc.), or (3) increase some other General Fund tax or revenue in an amount sufficient to pay the debt service on an additional $75 million of bonds."
"Something will have to give," she concluded.
Governor Hogan's repeal of the stormwater fee requirement would have little legal effect, since counties would still be subject to the EPA pollution reduction targets, and counties would still have the authority to collect such fees if they chose. But the political impact, particularly on a Republican-led and tax-averse county like Anne Arundel, would be huge. The populist but ultimately purely symbolic gesture on Mr. Hogan's part to push for a repeal creates a public expectation that local officials like Mr. Schuh cannot responsibly meet.
Given the flexibility counties already have under the law, there is no practical reason that the legislature needs to take up changes to the stormwater fee requirement. But if lawmakers are insistent on doing so, something along the lines of legislation gaining momentum in the Senate is the way to go. Although that bill, which has the blessing of Senate President Thomas V. Mike Miller, contains a number of ancillary provisions that give us pause, its general thrust is honest and straightforward: It eliminates the requirement that the 10 jurisdictions enact a fee but does require them to submit to the state a detailed plan for what combination of borrowing, fees, taxes or operating revenue will be used to meet the requirements. When it comes to stemming stormwater pollution into the Chesapeake Bay, there is no free lunch, and the sooner state and local officials acknowledge that, the better.