Income Tax and Environmental Measures Among the New Laws That Took Effect July 1

A number of new state laws took effect yesterday, many of which were of interest to local government.  The Baltimore Sun (limited free views) provides a recap of the major tax and environmental law changes.

Tax increase: The new rates affect individuals making more than $100,000 and families making more than $150,000. The measure, projected to raise $250 million, lifts rates on about 14 percent of Marylanders by one-quarter to three-quarters of a percentage point, while also phasing out personal exemptions.

The change is retroactive to January, meaning that some people accustomed to getting a tax refund will owe taxes next year. The comptroller’s office is waiving fines if filers miscalculated estimated taxes owed, though that may be small consolation to those accustomed to getting money back.

Flush fee: At least some Marylanders will start paying more on their utility bills, as the state’s so-called flush fee doubles from $2.50 a month to $5.

O’Malley pushed for the increase as a cornerstone of Maryland’s effort to restore the Chesapeake Bay. The change will raise about $50 million more annually and keep the state on track to finish upgrading its largest sewage treatment plants by 2017, as required under a “pollution diet” imposed by the Environmental Protection Agency.

Septic fee: Households on septic systems also will see the amount they must pay double, from $30 a year to $60, with the fee typically wrapped into annual property tax bills. The money will be used to replace failing septic systems and to pay farmers to plant pollution-absorbing cover crops in the fall.

Another law, which curbs large-scale development on septic systems in rural areas, likely won’t be felt for months or years. O’Malley made the law a priority for cleaning up the bay, because septic systems pollute more than households on sewers. Local governments have until the end of the year to adopt the law’s guidelines targeting growth in existing communities, and projects already in the works are grandfathered for up to four years.

Storm-water pollution: Baltimore City and the state’s nine largest counties — including Anne Arundel, Baltimore, Harford and Howard — will have to levy fees on residents for controlling storm-water pollution, a growing source of the bay’s water-quality woes. Local governments have until next year to set the fees; the Baltimore City Council voted this week to ask city voters in the fall to approve the creation of a storm-water utility for the purposes of raising the needed funds.

A complete listing of the 223 bills that took effect yesterday can be found on the General Assembly’s website.

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