A March 14 opinion piece run by the website Center Maryland, authored by a Baltimore-Washington area business organization’s director, raises concerns over the implementation and unintended consequences of a State-mandated stormwater management fee that nearly half of Maryland’s counties must enact. As previously reported on Conduit Street, legislation from the 2012 Session (HB 987) requires the 10 counties who are subject to a national pollutant discharge elimination system Phase One Municipal Separate Storm Sewer System permit to enact a stormwater management fee by July 1, 2013. The fee is designed to cover stormwater mitigation costs under the Chesapeake Bay Total Maximum Daily Load (TMDL) and local water TMDLs. The affected jurisdictions include Anne Arundel, Baltimore, Carroll, Charles, Frederick, Harford, Howard, Montgomery, and Prince George’s Counties and Baltimore City.
The article highlights concerns over using impervious surface to set the fee for non-residential properties:
For residential property owners, the fee will be an irritant, but manageable, on the order of $35 to $200, depending on whether it’s a condo/townhome, single family house or larger residential/agricultural property.
However, for non-residential properties, including those currently exempt from property taxes such as private schools, non-profits and churches, the fee will likely be a huge shock, ranging from $600 to nearly $3,000 per acre of impervious surfaces, under current legislative proposals.
For some major employers in Maryland, the fee will exceed $300,000; for a parochial school it may mean $6,000. A golf course may have a fee of nearly $7,000 for the golf cart paths alone. Another irony is that for some property owners, the impervious surfaces fee will exceed the property tax bill.
The article also notes a potential issue for counties subject to “tax caps” if the fee is found to be equivalent to a tax:
A recent decision by the United States Court of Federal Claims in Georgia held that the stormwater management charges assessed by DeKalb County, Georgia were taxes. “The charges are set by the County’s legislative body, they are imposed on every owner of developed property in the unincorporated portion of the county, and they are used to provide benefits that are enjoyed by the public as a whole,” the Court stated.
If such a ruling applies to Maryland, it could present a significant problem for those jurisdictions with tax caps. Indeed the fiscal and policy note for HB 987, prepared by Maryland’s Department of Legislative Services, telegraphed as much: “In jurisdictions that have a charter limit on their property taxes, establishing a stormwater remediation fee may necessitate an offsetting reduction in some other property tax, to the extent the fees established under the bill are considered property taxes.”
The article raises several other implementation concerns and suggests that the General Assembly delay the implementation of HB 987 for one year in order to address the issues raised in the article.