Here We Go Again—Fees and Taxes

Nov. 30, 2016
Sw Jk Blog

By some estimates, more than 1,400 stormwater utilities now exist in the US, but each time a community attempts to set one up, it’s a new process all over again—introducing residents and potential ratepayers to the concept, enlisting the support of elected officials, setting up a rate structure. And each time, there are opponents. Sometimes they’re vocal homeowners and businesses who oppose the utility fee, and sometimes they’re willing to go to court over it. But slowly, as utilities become more widespread, they seem to be gaining acceptance, and with luck it’s easier to launch one today than it was a decade ago.

That’s why it’s so disappointing to see an argument against utilities get so much publicity—and spread so much misinformation—as in this editorial that appeared last week in the Wall Street Journal. The writer is Stephen Ford, a resident of Alexandria, VA, a city that is attempting to set up a stormwater fee. He notes that part of the city’s motivation is EPA’s mandate to control polluted runoff entering the Chesapeake Bay. He writes, “Alexandria’s solution is to implement a new ‘stormwater management fee’ to fund green pet projects like rooftop gardens on municipal buildings and permeable pavement in parks.”

Ford adamantly opposes the fee. He reports on a meeting hosted by the city’s Environmental Policy Commission to discuss the proposal with local citizens, and in summarizing the information presented there, he accurately explains the concept of permeable and impermeable surfaces, and the fact that businesses will pay a fee based on the impermeable surface on their property. But he persists in calling the fee a “rain tax.” He writes, “There are also a number of fictions hiding under the surface. Most glaring is the claim that the fee isn’t a tax. This is a distinction without a difference—especially since the fee will be assessed annually with property taxes.”

There are differences, of course, between taxes and fees. One is that a fee is collected for a specific purpose—such as for a service provided, like stormwater management—and is based on the cost of providing that service; it can’t be diverted for other, unrelated uses. Another distinction that’s often made is that potential payers of a fee have the chance to opt out by choosing not to use the service—something that, in the case of stormwater utilities, property owners might achieve by implementing stormwater management measures on their own property in exchange for a stormwater credit. The editorial makes no mention of whether credits will be available in Alexandria, but as outlined on the city’s own website, it appears they will be an option. For more on credits, see this article by Andy Reese, which provides a comprehensive view of the subject.

Interestingly, Ford also writes, “Currently, 70% of the money that the city is spending to comply with the mandate comes from the general fund, with the rest coming from property taxes. According to the city’s math, this means that residential properties—including homeowners like me—pay about 58% of the total cost, although we contribute only 37% of the rainfall runoff.” Yet he still considers the fee to be the less-fair solution. You can read his complete argument online.

StormCon Call for Papers Deadline Is December 7

StormCon, the only North American event dedicated exclusively to stormwater and surface-water professionals, is seeking abstracts for presentation at StormCon 2017, which will take place in Seattle on August 27–31, 2017. The deadline for submitting abstracts is Wednesday, December 7, 2016.

We are accepting abstracts in six conference tracks: BMP Case Studies, Green Infrastructure, Stormwater Program Management, Water-Quality Monitoring, Industrial Stormwater Management, and Advanced Research Topics. For descriptions of the tracks and more information about submitting an abstract, please visit www.StormCon.com.  

About the Author

Janice Kaspersen

Janice Kaspersen is the former editor of Erosion Control and Stormwater magazines.