Mostly commonly known as the rain tax, the Storm Water Management Watershed and Restoration Program (Maryland HB 987) went into affect last year and made plenty of headlines for its controversial fee. The rain tax is in the news again now as the Maryland General Assembly is back in session and members voice their opinions of the tax. In this blog we’ll give you an overview of the history of the tax and its intended affect.
The Maryland Rain Tax
The origins of the rain tax can be found in a mandate by the EPA which was aimed at reducing the amount of pollution in the Chesapeake Bay, specifically, nitrogen levels by 22% and phosphorus by 15%. Stormwater is a major source of pollution in the bay, as the runoff created by storms collects pollutants and sediments and deposits them in the bay. Runoff itself is caused by the fact that many of the surfaces stormwater encounters are impermeable, which prevents the water from naturally soaking into the earth.
Therefore, Maryland decided to work toward the EPA’s goal of reducing pollution with the rain tax, which taxes properties based on their impermeable surfaces. The amount of the tax is left up to the counties which levy it. Some choose a flat fee while others charge based on total surface area. The revenue generated by the tax goes toward stormwater management efforts that would reduce the amount of pollution in the bay.
The tax has been controversial, with opponents highlighting what they feel is the unjust nature of the tax. Proponents have argued that the tax allows for a dedicated revenue stream for stormwater management purposes, as opposed to having to funnel revenue from property taxes, for example. The taxis predicted to raise $14.8 billion. You can read more about how stormwater management works in our blog.