Among other stunning Election Day defeats was the unexpected loss of Maryland Lieutenant Governor Anthony Brown in his bid to become the state's governor. Instead, businessman Larry Hogan won a race that virtually nobody was expecting to be competitive.
Elections are always multi-faceted affairs, but one critical cause of Brown's downfall was arguably the unpopularity of a measure known to its opponents as a "rain tax":
Two words for anyone wondering how Brown lost #MDGOV: "Rain tax." What every voter in a swing precinct today mentioned to me.— Alec MacGillis (@AlecMacGillis) November 5, 2014
The GOP victory was so unexpected that the media didn't even conduct Maryland exit polls, so it's not really possible to supplement these anecdotes with hard facts. But the rain tax is interesting! So let's go with it and understand what this policy is and why it matters.
1) What the heck is a rain tax?
Mostly it is a clever piece of branding by the initiative's conservative opponents. Nobody is taxing rain. Not in Maryland, not anywhere else. The tax is levied on impervious surfaces — driveways, parking lots, and other hard surfaces that do not absorb water. Its proponents prefer to call it a "stormwater remediation fee."
2) Why would you tax that?
For a pretty good reason! When rain falls on impervious surfaces, the water doesn't vanish. It runs elsewhere. And when that runoff passes through built-up cities and suburban areas, it gets polluted. As the Chesapeake Bay Foundation explains, "As water flows off of our streets, parking lots, and building rooftops, it picks up fertilizers, pesticides, oil, and automotive fluids, pet waste, sediment, and other pollutants."
That polluted water then ends up flowing into streams, rivers, and ultimately the Chesapeake Bay.
3) Okay, so impervious surfaces are bad. But what does the tax accomplish?
Two things. One, it raises revenue that can be used for cleanup programs. Two, it creates a financial incentive to minimize the construction of impervious surfaces and to replace existing impervious surfaces with more permeable alternatives.
This style of grass pavement, for example, is much better for the environment than a conventional parking surface. Charging a fee for impervious surfaces creates an incentive to make permeable rather than impermeable surfaces.
4) How does the tax work, exactly?
Under House Bill 987, the ten largest and most urbanized jurisdictions in Maryland need to impose impervious surface fees. The law does not specify the level of the fee, only that the counties in question must set a fee to raise enough revenue to finance cleanup projects needed to meet targets set out in the Chesapeake Clean Water Blueprint.
Consequently, the fee structure varies quite a bit from place to place. This variability has arguably contributed to the tax's unpopularity. Marylanders discover that not only are they paying an unwelcome fee, but that the amount of money they need to pay may be quite different from what a coworker or friend in another county is paying. This is just a result of administrative decentralization, but it comes across as arbitrary, unfair, or confusing to some.
5) Enough about impermeable surfaces, where's a song?
No rain tax debate would be complete without Garbage's 1996 hit, "Only Happy When It Rains."
6) This sounds great, why are people mad?
Well, sure, it sounds great to you. You are a discerning reader of explanatory journalism, and you understand that Pigouvian taxes to correct environmental externalities are part of any savvy modern policymaker's toolkit. But to the man on the street, it's a big ol' tax on his driveway. Even worse, its opponents came up with the idea of calling it a "rain tax." Who would tax the rain? Everyone knows rainwater runoff is totally harmless, unless you care about something silly like wildlife or drinking water.
7) Can we draw any broad, sweeping conclusions from this?
Sure! The rain tax controversy is a little narrow and weird, but it speaks to a big reality in American politics. People really do not like paying taxes. They like having money, and they do not have a lot of confidence that the government will spend their money wisely. This isn't just true of voters in Oklahoma and Nebraska, it's true of voters in Maryland too. It's true that taxing the rich — i.e., having other people pay more taxes — is pretty popular. But people don't want to pay more taxes themselves.
This is a problem for liberals for two reasons. One is that many environmental and public health problems are best-solved through this kind of tax. The logic for taxing impermeable surfaces is a small-scale version of the logic for taxing carbon dioxide emissions. If you can't sell these kind of solutions even in Maryland, you're going to have severe trouble tackling major issues. The other is that the countries who've had the most success in tackling inequality — places like Sweden — don't just tax the rich. To be clear, they do tax the rich more heavily than the US does but they tax the middle class even more heavily. They use these broad-based taxes to finance broadly used social services, just as America's Social Security relies on both broad taxes and broad benefits. If you can't sell people on tax hikes, it's hard to make much progressive headway.
8) What does it mean for Hillary Clinton?
It's good news! Realistically, Maryland governor Martin O'Malley was not a serious threat to Clinton regardless of the 2014 outcome. But the humiliating defeat for his chosen successor in a blue state makes him look quite bad. The damage is especially painful because Brown was very closely associated with the O'Malley administration and the campaign against Brown consisted overwhelmingly of attacks on O'Malley policies. Things like the rain tax or the gasoline tax hike that O'Malley also pushed through.
The rain tax should be a symbol of the positive story O'Malley wanted to tell about himself — it was a smart, fiscally and environmentally responsible solution to a very real problem. It was part and parcel of a solid record of concrete progressive achievements. One of many places where O'Malley really delivered. And in doing so, he seems to have provoked a big backlash.
9) What's next for Maryland?
It is difficult to say for sure, but quite possibly nothing at all. Maryland Democrats hold comically large majorities in the state legislature. Republicans picked up seats in 2014, but that still leaves Democrats with 33-17 edge in the State Senate and a 91-50 advantage in the House of Representatives. In other words, the Hogan administration is not about to usher in some era of dramatic new conservative legislative initiatives. Democrats are under very little objective political pressure to compromise, and should be able to hold the line on anything they care about.
Repeal of an unpopular rainwater runoff fee, however, is exactly the kind of bone a legislative leader might be inclined to throw to a newly elected governor for the sake of compromise and getting things done.