Cost of $#!* to Double

Doubling flush tax increase almost certain, Bay Restoration Fund still vulnerable to future raids

Most Marylanders will see their flush tax bill double from $30 to $60 beginning July 1, but the Chesapeake Bay Restoration Fund will remain vulnerable to raids that have climbed to $290 million since 2010.

The Senate approved the fee increase in 28-18 vote late Saturday, with an amendment that exempts some areas in far western Maryland and Ocean City that are not part of the Chesapeake Bay drainage area. The House, which has already passed the measure, is likely to agree to the amendment.

The cash withdrawals from the fund were replaced over a three-year period with general obligations bonds. These will be issued when projects are “shovel ready,” said Environment Secretary Robert Summers on several occasions during the 2012 legislative session.

The 100% tax increase will bring $385 million in additional revenue to the Bay Restoration Fund by 2017 to upgrade 67 sewage treatment plants. The administration claims the original estimate of $750 million for the upgrades was too low. The correct estimate is now $1.4 billion.

"We only missed by a factor of two last time; you can trust us this time." 

As for the raids on the Bay Cash?

Senate Republican Leader E.J. Pipkin railed against raids on the fund as “credit card” spending and also questioned the drastic increase in the cost estimates.  “You’re doubling the tax yet you continue to raid money and replace it with I-O-U-s,” Pipkin said during a Senate session on Saturday. “We put these projects on a credit card.”

Sen. Paul Pinsky, chair of the Environment and Health subcommittee and co-sponsor of the administration bill, insisted the raids “didn’t interfere with any of the projects” and defended the $290 million in cash withdrawals from the fund. “It is my understanding the shifting of funds happened one-time,” Pinksy said. “It hasn’t been a recurring growth of big-government. It was done during a situation that called for filling a hole in the state budget. It was done once, so they put in bonds to care of it.”

But a Moody’s report 14 months ago downgraded bonds backed by flush tax revenue because of “raids on fund balances” in 2010 and 2011 of $200 million. The report also warned that future raids could result in another downgrade. An additional $90 million was taken from the fund in fiscal 2012 — four months after the Moody’s report.

In other legislative news, Gov. O'Malley's  plan to restrict septic tanks continues to move forward:

A bill that limits the future use of residential septic systems passed the House on Friday with support from some Republicans.Opponents consider the bill a "big brother" power grab that will handicap farmers, while supporters argued the legislation will curb growth and protect the Chesapeake Bay.

The bill -- one of Gov. Martin O'Malley's legislative priorities to curb sprawl -- went through delays and maneuvers that have frustrated supporters and opponents alike. Despite its passage Friday by a 93-45 vote, the bill is still not ready for the governor's signature.

The measure requires counties to draw mapped tiers of development before any major subdivisions served by septic systems could be approved. One provision stripped from the original proposal would have given the state authority to deny permits if the Maryland Department of Planning finds that counties didn't abide by the guidelines.The House amended the Senate version even more by mandating documentation that would explain why a county does not adopt one of the tiers.