Who’ll tax the rain?

“Into each life some rain must fall,” or so goes the Inkspots’ song from the 1940s.

This decade’s corollary might be, “Into each life some rain must fall, and now you have to pay for the privilege.”

In the flurry of activity in the 2012 Maryland legislative session, along with high-profile bills on same-sex marriage and the DREAM Act, our lawmakers passed a law that forced local jurisdictions to charge fees to remediate pollution in the Chesapeake Bay watershed. The fees on impervious surfaces – building roofs, parking lots, driveways, etc. that do not allow rainwater to seep into the ground – are, in effect, another property tax.

The law is well-intentioned, as it aims to help Maryland comply with federal regulations from the Environmental Protection Agency to reduce daily loads for pollutants in bodies of water. Total Maximum Daily Load refers to the total quantity (or load) of a pollutant that a body of water can carry and still conform to designated uses and fishable/swimmable water quality. Maryland is trying to get everything in place by the time Clean Water Standards from the federal government go into effect in 2017. We all recognize that the bay, streams and rivers, are vital to Maryland’s economy and quality of life. Exactly how to clean that up, and how to pay for it, are thorny questions. Though the legislation mandates the fee, it’s up to local jurisdiction to determine the rates.

The legislation passed in 2012 made the fee mandatory for all property owners in Baltimore City and nine counties, with no exemption for nonprofits that are traditionally exempt from property tax. Even federal properties are included in the fee. Conveniently, however, state and local government properties, such as city hall and schools are exempt. So a Catholic school would be charged the fee, but a public or charter school nearby would be exempt. Amendments to the legislation in the 2013 session attempted, but failed, to put in exemptions for nonprofits. Conversely, if nonprofits are included in the fee, state and local property should be assessed as well.

Frederick County officials sought for the county to be exempt from the fee altogether. Having failed with that, they want to set the maximum fee for any property to a penny. That’s one way around the law. Some other jurisdictions have agreed to provide a lower rate or a cap for nonprofits. The Baltimore County Council this week voted to reduce the nonprofit rate to $20 per Equivalent Residential Unit (2,000 square feet of surface), about 28 percent of the base rate. And Anne Arundel County capped the fee for religious non-residential property owners at $1, and exempted everything within the city of Annapolis, good news for St. Mary’s parish, its school and St. John Neumann mission.

Mary Ellen Russell, executive director of the Maryland Catholic Conference, notes that such exemptions or rate reductions are appropriate because any such fee would take away funds from the ministerial and charitable work nonprofits do. In addition, it would take funds away from any possible mitigation projects a nonprofit might undertake, such as rainwater collection and diversion systems or rain gardens.

Another concern noted by Russell and others is the high fee in Baltimore city, higher by far than any other jurisdiction, which at $68.50 per 1,000 square feet is more than double any rate other than only Baltimore County, at $36 per 1,000 square feet. The legislation lists things the money should be spent on, but concerns remain about how those funds will be used, since there is nothing specific to segregate the funds only for use on the environment. The high fees in the city could encourage more businesses to relocate outside the city, further hampering efforts by city leaders to bring in residents and business. Most nonprofits – such as Catholic Charities’ Our Daily Bread Employment Center or St. Vincent de Paul’s Beans and Bread – don’t have the option to relocate, since they are located where their services are needed. And parishes, such as St. Matthew, Northwood, which faces a rain tax of nearly $12,000 annually, can’t leave either.

Russell notes, “It’s fair to say that nobody understood the impact of this bill when it passed,” and the law delegated to local governments the funding mechanics. “It’s the responsibility of the state Legislature to fix this,” she said.

In the meantime, those who wish to affect the rain tax in their area are urged to contact their local city or county government officials to urge a reasonable rate for nonprofits, and for residents and businesses too.

We all want to do our part to save our bay, rivers and streams. But unless this tax is mitigated, we may all be singing another song: Credence Clearwater Revival’s “Who’ll Stop the Rain?”

Copyright (c) April 19, 2013 CatholicReview.org

Catholic Review

The Catholic Review is the official publication of the Archdiocese of Baltimore.