Donald Fry: Miller Gets It Right on ‘Rain Tax’ Repeal

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By Donald C. Fry

This week, the Maryland House of Delegates heard proposed legislation by Senate President Thomas V. “Mike” Miller to repeal the state’s controversial “rain tax” and replace it with an optional fee that counties can impose at their discretion.

The bill passed the Senate last week with a vote of 46-0. This comes after the House Environment and Transportation Committee voted earlier this month to defeat a similar proposal by Governor Larry Hogan.

On April 1, that same House committee heard Senate Bill 863, which would repeal the requirement that the state’s 10 largest jurisdictions charge a fee to help pay for federally-mandated stormwater management processes that are meant to curb pollution in the Chesapeake Bay. However, counties would be required to submit plans for how they will meet the federal requirements, identify sources of funding to implement them and to regularly report the status of its compliance under the plans.

Funding sources could include implementing a fee but, rather than being mandated by the state, it would be at the county’s discretion. Montgomery County, which implemented its own stormwater remediation fee before the statewide fee was enacted, would be exempt.

Eliminating the rain tax was a centerpiece issue in Governor Hogan’s campaign last year. 

Environmentalists generally favor a state-mandated fee. But “we’re okay with increased flexibility as long as there’s increased accountability,” Alison Prost, Maryland executive director of the Chesapeake Bay Foundation, told members of the Environment and Transportation Committee. The reality is that the current law “is not working on the ground the way it was intended,” she said.

Meanwhile, on March 13 “Clean Water, Healthy Families,” a coalition of Bay advocates, released poll results demonstrating that public support for stormwater remediation fees can be strengthened by more information about their purpose.

According to the OpinionWorks poll, which surveyed 594 registered voters, 84 percent of voters believe the problem of local water pollution can be fixed but fewer than four in 10 believe their local government has enough money and resources to tackle the problem. Most respondents said they would support a reasonable fee dedicated to curbing water pollution but only 23 percent of respondents supported the rain tax based on what they know or have heard, while 40 percent were opposed.

Once provided with facts about the fee – including that all funds collected locally will stay in local communities to pay for projects that improve water quality in the Bay and its tributaries – support of the fee jumped to 46 percent while opposition dropped to 33 percent. If voters believe a stormwater remediation fee would be effective at reducing pollution, their support tends to be stronger, the survey showed.

Clearly, Marylanders care about pollution entering the state’s waterways and are willing to pay for prevention as long as they are confident that taxpayer money will go toward effective pollution reduction projects.

State officials have already told the affected jurisdictions they do not have to impose the fee if they can find another way to keep stormwater runoff from entering the Chesapeake Bay.  The legislation proposed by Senate President Miller ratifies that policy, striking a good balance between appeasing opponents who see a fee as another “tax” and fulfilling the state’s responsibilities to the federal government and its citizens to clean up our waterways.

From the standpoint of public perception, should Miller’s bill pass it could be argued that the rain tax is gone. But in reality the pressure still would fall to Baltimore City and nine counties to find ways to meet the federal stormwater remediation requirements by using existing sources of funding.  Or, they could impose a tax – except that the tax wouldn’t be mandated by the state.  Instead, local officials will have opted for the tax.

Senate President Miller, using his extraordinary skills and acumen as a legislator and leader, has found a way through the mass discord created by the so-called “rain tax.”  His proposed legislation would accomplish two key objectives.

First, it would end the public perception that a new tax had been created by the state.  It wasn’t really, but lawmakers had concocted an awkward way to enable local jurisdictions to address funding challenges related to complying with EPA stormwater remediation regulations.

By the way, those funding challenges vary widely among the 10 affected jurisdictions.  Projected capital spending in the next five years required to comply with the EPA regulations ranges from $464 million in Anne Arundel County to $5 million in Harford County, according to legislative analysts.

Other projected five-year capital costs for Baltimore region jurisdictions are: $146 million for Baltimore City, $135 million for Baltimore County, $100 million for Howard County and $21 million for Carroll County.

Second, Miller’s legislation would ensure that the impacted counties submit regular reports showing that they are complying with their plans for mitigating polluted stormwater runoff.

In hindsight, passage of the stormwater management fee by state lawmakers was an overreach. Whenever one political party dominates, whether it is in a state legislature or on Capitol Hill, the temptation can be overwhelming to take legislative action because you know your party has the numbers to get something passed.

The best lawmaking, however, involves finding the least burdensome or restrictive but effective way to accomplish an ultimate goal, which in this case is planning and funding new strategies to keep the Chesapeake Bay clean.

Senate President Miller – a seasoned political pro – has shown how to accomplish the same goal without having to overreach to make a major constituency happy.

Not surprisingly, Miller got it right.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.  

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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.

Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.

Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.

Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.

Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.