By E.B. FURGURSON III, Staff Writer July 16, 2006
A ruling by the Maryland Attorney General could bring the county one step closer to establishing a fund to repair damaged watersheds.
The attorney general said a charge for a stormwater utility can either be considered a fee or a tax under state law, clearing a potential legal hurdle in the county's process.
"You can call it what you want to," Assistant Attorney General William R. Varga said in an interview following the release of an opinion sought by County Executive Janet S. Owens several months ago.
Ms. Owens wanted to have the fee/tax question settled, partially because if it is a tax it might be stymied by the county's tax cap.
The decision does not green light any proposal as Ms. Owens has said her administration would not take up such a measure no matter what the ruling. She wants to leave the decision to the next county executive and County Council..
But the ruling does say that even if an ordinance creating stormwater fund was written so the mechanism is a tax, it would not be subject to the tax cap.
Proponents of a dedicated fund to pay for stormwater-related repairs have pushed the notion as a fee, for the same fear of the tax cap factor, plus the semantic value of promoting a fee rather than the "T-word."
What it will be called in any legislation that might be considered in Anne Arundel County is a matter of semantics. But the anti-tax sentiment expressed in the county when the tax cap was passed in 1992 looms over the stormwater utility and any other issue that depends on raising funds to pay for needed programs.
County Attorney Linda Schuett said the technical operation of any fee collection would have to be structured as a tax under Maryland law. But it would be an excise tax, not a property tax precluded by the tax cap.
"What this opinion says is we can create a new fund then do an ordinance that imposes an annual fee on each property," Ms. Schuett said.
But it must be structured so precisely under the murky current law it would take months to do, she said..
"It's complicated," Ms. Schuett said. "It took the attorney general eight months studying its opinion. If we dropped everything else now, we could not get it done by this (County) Council."
Mr. Varga agreed it can get done. He said he thinks it does not matter what the funding mechanism is called.
But he said the proposal that has been floated in the county, having property owners pay a fee based on how much paved, or impervious, surface covers their land likely makes the technical mechanism an excise tax by definition under Maryland law.
"The utility concept under Maryland court's restrictive interpretation of a fee would most likely make this a tax," he said.
He said it would be an excise tax because it is not imposed simply on the basis of property ownership.
"It is not linked to ownership alone but to how much impervious surface (is on the property)," he said. "The use of the property is generating runoff."
That runoff, pouring off paved surfaces and rooftops rather than being slowly absorbed by plants and trees, is the root of the problem that has gouged out streams and watersheds, carrying untold tons of sediments loaded with polluting nutrients into county waterways and the bay.
Mr. Varga said the law is as murky as a clouded stream and many county attorneys have called it an area of Maryland law ripe for review by the Court of Appeals.
"But that has not happened yet," he said.
Courts in at least nine states, from Florida to Washington, have found stormwater funding mechanisms to be valid user fees.
Published 07/16/06, Copyright © 2006 The Capital, Annapolis, Md.
