Rain Tax

In 2012, the Maryland General Assembly and Governor O’Malley passed legislation establishing the Stormwater Management – Watershed Protection and Restoration Program. The law, passed in response to an Environmental Protection Agency (EPA) mandate to decrease the amount of certain pollutants flowing into the Chesapeake Bay, requires Maryland’s nine most populous counties and Baltimore City to establish new taxes to fund rainwater runoff remediation efforts. The law does not currently apply to St Mary’s County, but the county’s population has reached a level that makes its inclusion likely in the near future.

Major Concerns Regarding the Rain Tax

  • Marylanders are already saddled with one of the highest tax burdens in the nation, and are already paying for numerous existing bay cleanup efforts. This program will take tens of millions of additional dollars out of home and business owners’ pockets annually.
  • This tax is the result of an unfunded federal mandate
  • While the EPA requirements apply to several states in the Chesapeake Bay area, only Maryland responded by imposing a rain tax on its citizens
  • Public outreach and education efforts are among the intended uses of rain tax funds despite the fact numerous public and private Chesapeake Bay public education efforts already exist
  • Since most counties base at least part of the tax upon the amount of impervious surfaces (i.e., pavement and buildings) on a property, business are hit especially hard. This will drive more businesses out of Maryland, and cost jobs.
  • Forcing counties to increase their taxes will allow the state to divert funds formerly used for bay restoration at the state level to other purposes1
My solution:
  • Repeal the rain tax and develop alternative solutions that balance the need to protect the bay with the need to reduce Marylanders’ tax burden
  • Push back against unfunded federal mandates
  • Explore solutions that improve bay water quality without infringing on property rights, such as dredging behind the Conowingo Dam to prevent flooding the bay with sediment after heavy rainstorms
1. Source: Maryland Department of Legislative Services Fiscal and Policy Notes for House Bill 987