Cennamology Chief Editor
In this year's Maryland governor's race, GOP candidate Larry Hogan's chief strategy is to convince voters that Maryland is extremely overtaxed, and that a change in the state's tax system is needed in order to bring businesses back to the state, a change that will not come if Lt. Gov. Anthony Brown is promoted to the state's chief executive.
To be honest, there is some truth to what Hogan is saying. But one of the examples he uses in his ads is not entirely honest. In his ad, one of the lines he uses to give an example of the O'Malley-Brown administration's tax-happy nature is that "Maryland is the only state that taxes the rain."
Hogan is referring to Maryland’s Stormwater Remediation Fee, which is commonly called the “rain tax.” The “rain tax,” which affects the nine largest counties in the state plus the city of Baltimore, passed in April 2012 in order to satisfy federal Clean Water Act requirements. The state government saw that the most effective method to reducing stormwater runoff, the fastest growing source of pollution in the Chesapeake Bay, is putting a price tag on it.
One must also consider the effects that stormwater runoff has had on the decades-long degradation of the Chesapeake Bay, Maryland’s most important environmental and economic resource. Stormwater runoff carries many substances toxic to the Bay’s habitat including trash, oil, sediments, and fertilizers. The revenue from the tax is intended to help the jurisdictions pay to adopt programs and build infrastructure to limit the damage of runoff to the Bay.
The “rain tax” is the most economically feasible way to reduce stormwater runoff in the Bay because it essentially raises the price on impervious surfaces. This means that the quantity demanded for these surfaces will be reduced. The development of impervious surfaces on properties will decrease in order to avoid the tax, and the pollution to the Bay that is attributable to them will decrease as well. This will occur even if the more conservative county governments critical of the tax do little to combat the problem. The tax will also provide incentive for owners to replace impervious surfaces on their property with natural alternatives.
The “rain tax” has many long-term benefits as well. Pollution reduction does not happen overnight, but it certainly has far-reaching economic benefits. The reduction in pollution brought from the decrease in quantity demanded of impervious surfaces will increase the demand for recreational activities in the Bay as well as the supply of other resources obtained from the Bay including seafood. The increased supply of seafood obtained from a healthier Bay can potentially lead to lowers costs for consumers at grocery stores and restaurants.
Hogan’s ad line about Maryland taxing the rain fails to encompass the complexity of the environmental and pollution concerns surrounding the Chesapeake Bay that has plagued the state for many years. It seems as if Hogan is trying to imply that O'Malley-Brown is taxing the rain just for the sake of taxing people. In reality, the tax is the most economically viable way to achieve what the EPA is mandating.
While Maryland has made progress reducing other sources of Chesapeake Bay pollution, impervious surfaces were ignored until it was clear that Maryland’s regulations of them were not up to par with EPA standards. The effects of stormwater runoff in the Bay could not go ignored, and the impervious surfaces tax is the most economically effective way to address this problem.