Consider all the ways we’re taxed. When we’re born (birth certificate), when we die (death certificate), when we make money (income tax), when we spend money (sales tax), when we own property (property tax), when we sell property (capital gains tax), when we go to a concert or ball game (amusement tax), when we own a vehicle (license, registration, tolls, gas tax) and special taxes on cell phones, tobacco, alcohol, energy, etc. Then, when we die, they tax our income all over again (death tax). Heck, they even tax our bowel movements (flush tax).
But if you thought they ran out of ways to tax us you badly misjudged our lawmakers’ creativity. Get ready for their newest invention, the rain tax. Here’s what’s going on:
In 2010 the Obama administration’s Environmental Protection Agency ordered Maryland to reduce stormwater runoff into the Chesapeake Bay so that nitrogen levels fall 22 percent and phosphorus falls 15 percent from current amounts. The price tag: $14.8 billion.
And where do we get the $14.8 billion? By taxing so-called “impervious surfaces,” anything that prevents rain water from seeping into the earth (roofs, driveways, patios, sidewalks, etc.) thereby causing stormwater run off. In other words, a rain tax.
And who levies this new rain tax? Witness how taxation, like rain, trickles down through the various pervious levels of government until it reaches the impervious level — me and you.
The EPA ordered Maryland to raise the money (an unfunded mandate), Maryland ordered its 10 largest counties to raise the money (another unfunded mandate) and, now, each of those counties is putting a local rain tax in place by July 1.
So, if you live in Montgomery, Prince George’s, Howard, Anne Arundel, Carroll, Harford, Charles, Frederick, Baltimore counties or Baltimore city, you’ll be paying a rain tax on your next property tax bill.
Well, you ask, “How on earth can the government know how much impervious surface I own?” Answer: It’s not on earth, it’s in the sky. Thanks to satellite imagery and geographic information systems, Big Brother can measure your roof and driveway (and you thought drones were only used for killing terrorists).
OK, once the counties raise this money, how is it spent? The state law is kind of squishy. It can be spent to build and maintain stream and wetland restoration projects. And, of course, a lot of it will go to “monitoring, inspection, enforcement, review of stormwater management plans and permit applications and mapping of impervious surfaces.” In other words, hiring more bureaucrats to administer the rain tax program.
It can also be spent on “public education and outreach” (whatever that means) and on “grants to nonprofit organizations” (i.e. to the greenies who pushed the tax through the various levels of government).
If I asked you to guess which Maryland county is already levying a rain tax on its citizens, you’d correctly answer “Montgomery,” the “more taxes, please” jurisdiction that collected a $17 million rain tax last year. So, since Montgomery County already has a rain tax in place (but only on residences) let’s take a peek at the future. Here’s how Montgomery County is spending some of its rain tax:
“(The county) holds workshops and training events to help residents understand how various projects work. Projects such as rain gardens, conservation landscaping, rain barrels and cisterns, drywells and tree planting are then offered to be installed on properties that qualify, based on the County’s assessment.”
So, I’m supposed to pay a rain tax so the county can train me how to plant a tree, which they’ll give me if, in its view, I qualify? Have we all gone mad?
According to state officials, the 10 rain tax counties must raise $482 million a year to finance the $14.8 billion stormwater cleanup bonds by 2025. About 75 percent will come from homeowners and about 25 percent will come from non-residential property owners.
Credits and exemptions must be granted to property owners who already meet stormwater “best practices” standards. And the county governments can phase-in the rain tax levels (to get them past the next election). Most homeowners will pay around $100 a year (less if you live in an apartment or condo). But the rates may double or triple later.
It’s the nonresidential owners who are getting hit, annually, with five- and six-figure amounts because they own such large rooftops and parking lots (car dealerships, shopping centers, malls, office buildings, warehouses, etc.). Disclosure: My house has a driveway and a (sometimes) impervious roof, and I work for, and partly own, a commercial real estate company.
But homeowners are going to pay the rain tax three times. Once, on their homes. A second time because commercial leases force tenants pay the landlord’s property taxes, which the tenants will, then, pass on to their customers. And a third time as church members or supporters of nonprofit hospitals, private schools and charities.
You see, state lawmakers exempted government-owned property from the rain tax but imposed it on religions and nonprofits (which own big roofs and parking lots).
“What we are waking up to is that a number of counties are moving in the direction of a significant and very unexpected financial impact on organizations that ordinarily are not taxed because they’re nonprofit organizations that provide services to the community and work on very limited budgets,” says Mary Ellen Russell of the Maryland Catholic Conference.
Sorry, the environment comes first. In life, only three things are certain — death, taxes and rain.
Blair Lee is CEO of the Lee Development Group in Silver Spring and a regular commentator for WBAL radio. His column appears Fridays in Business Gazette. His email address is firstname.lastname@example.org.