Maryland is on the verge of implementing some fanatical mandates intended to help clean the Chesapeake Bay that will be economically disastrous and which will be totally ineffective in improving the quality of the water in the Bay.   These are the expensive stormwater remediation mandates that will be imposed by the State on the counties through the new stormwater discharge permits to be issued by the Maryland Department of Environment.  The per person cost of these mandates varies widely throughout the state.  State and local leaders must become educated on these permits so that they can require removal of the excessively expensive and ineffective portions of these permits, otherwise Maryland will severely punish itself with these fanatical mandates which cannot succeed in cleaning the Bay, but which will cause private businesses and jobs to leave the State, and residents, too.

Maryland is one of the highest taxing states in the nation.  The Tax Foundation web site ranks Maryland as the 10th highest taxing state in the nation.  My initial reaction to this ranking was to say, “Wow, I didn’t realize that nine other states were worse.”

But after reviewing the analysis by which the states were ranked I realized that the analysis omitted consideration of Maryland’s “Rain Tax.” The impact of this tax escaped analysis because it is not technically a “tax,” rather it is a “mandate” that the State imposes on the counties.  The State never collects any money; rather the State merely requires the counties (and Baltimore City) to do stormwater remediation projects that are intended to filter pollution from stormwater run-off.  So, while these mandates escaped consideration as a tax, their impact on residents is the same as that of a tax.  And it is a very expensive tax, at that—so expensive that it makes Maryland one of the highest taxing states in America.

Here’s a synopsis of how it works.  Under the direction of Governor Martin O’Malley, the State of Maryland has adopted the recommendation of some environmental groups (including the Chesapeake Bay Foundation) to require the counties to do various remediation projects intended to remove nitrogen, phosphorus and sediment from stormwater run-off.  Governor O’Malley is happily and blindly following the recommendation of these groups, as he seeks to make for himself the record of being the most environmentally progressive governor in America.    If his policies were good and effective, that would be fine.  But they are ineffective and economically disastrous, and therefore they need to be either corrected or stopped.

20% of the water that makes it into the Chesapeake Bay comes from the State of Maryland.  This means that IF Maryland were able to filter to acceptable level the nitrogen, phosphorus and sediment contents of all of the water that comes from Maryland, then this would still leave unaffected 80% of the water coming into the Bay.  Maryland alone cannot eliminate pollution in the Bay.  Only if all the Bay states enact and implement the same measures for cleaning the waters that flow into the Bay can the Bay waters be restored to good health.  Only uniformly implemented policies can succeed, and that is assuming that the uniformly implemented mandates are scientifically valid in the first place.  As will be shown below, there is good reason to doubt this.  But first, assuming uniform mandates could be successful, let’s consider the exorbitant cost of these mandates.

For the last year and a half the State has announced that it projects the cost of implementing the stormwater remediation mandates to be $14.4 Billion over the next ten years.   I seriously doubt the accuracy of this projection.  But leaving analysis of that projection until later, let us look a little more closely at the $14.4 Billion figure.

The 23 counties and Baltimore City make up 24 jurisdictions in Maryland.  The watersheds of 22 of these jurisdictions go into the Chesapeake Bay.  To simplify the initial analysis, let us assume that all jurisdictions are of equal size and that each is responsible for the same amount of stormwater run-off.  That would mean that each jurisdiction would be responsible to filter 1/22 of the State’s stormwater, and that each jurisdiction would then be responsible to pay for 1/22 of the cost (or 1/22 of $14.4 Billion over a 5-year period).  That would be a cost of $655 Million per county over 10 years (or $65.5 Million/county/year).  That would be a very expensive mandate to meet for Montgomery County, with its population of over one million people.  But this burden would be ten times as bad for a county with a population of 100,000 people.  In the case of Frederick County, with a population of approximately 240,000, the cost on us would be four times greater than the per person cost on Montgomery County.

Of course, the State plan for making these remediations is considerably more complicated, but as you begin to understand the complexities you realize that the State approach to cleaning the Bay is theoretically ineffective and still much too costly.  If State leaders do not take the time to understand the serious flaws in the current approach they will doom us to suffer senseless, self-inflicted, economic damage.

The stormwater remediation mandates are specifically directed towards properties that do not filter storm water—for the most part this means the impervious surfaces, like roads, rooftops and parking lots.  And the mandates are directed at existing impervious surfaces; state laws have strict requirements for new construction, so that the stormwater from it will not have excessive amounts of nitrogen, phosphorus and sediment.  But while the State is directing its attention at existing impervious surfaces, the State mandates (through HB 987 – the “Rain Tax”) give each county discretion as to how to fix it and how to fund the fixes.  The remediations can be funded from general county taxes or from fees levied on specific properties, or on a combination.  For example, a county could calculate the impervious surface for each property, and then assess a proportionate fee on each property.  Or, the county could just set a flat fee on each property.  The collected monies are not paid to the State, but the State oversees the remediation projects—to make sure that the required remediation takes place.  Each county is required to report its work and to certify its completion.

Currently, Frederick County is doing about $3.5 Million/year in stormwater remediation work.  Our great concern is that the new, pending State stormwater discharge permit will require us to do $22.5 Million/year in remediation work.  This would require the County to increase each property tax bill by $500/year.    Now, for those who are closely following the numbers, you will recall that in my simplified analysis above, I said the projected cost per county would be $65.5 Million/year—this is $43 Million more than the $22.5 Million figure.  Yes, I acknowledge the difference, and I’m grateful that the State is not yet threatening us with a higher figure.  Initially, when the State announced the policies to require stormwater remediation by the counties, the State did not calculate the cost of the mandates it was imposing.   It was only after several counties began to confront the MDE with the enormity of cost of the mandates, that the State began to revise downward some of its policies and to announce projections that were less expensive.  For example, the State did not announce its projected cost of $14.4 Billion until after it received feedback for several counties, including Frederick County, that the cost of its mandates was exorbitant.  Three years ago, Frederick County estimated the cost of the State mandates to be approximately $4 Billion in our county, alone.   As a result of this, the State began to revise its policies, after which it announced the $14.4 Billion projection.  Of course Frederick County is happy the amount has been reduced, but even under the reduced policies we are concerned that our cost could be $1.8 Billion.  Obviously, we are happy with reductions below our projections, but even the proposed cost of $22.5 Million/year is more than we believe would be either effective or legal.

Furthermore, the proposed $22.5 Million cost does not include the municipalities in the county.  And, of course, it is in the municipalities where most of the impervious areas are found.  The municipalities will ultimately be assessed their own mandates of an equivalent amount—perhaps another $20 Million/year.  If you are following my analysis, every taxpayer and property owner in the County should be very concerned.