Friday, November 7, 2014

Brown Loss in Maryland Voxsplained - It Was the Rain Tax

How did Democrats lose Maryland? Meet the rain tax.
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":

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.
Both longtime readers of this blog will be familiar with the "Rain Tax", so I'll skip the detailed exposition of this unique tax that Maryland imposed on 10 of more urbanized counties in the state.
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.
I would also note that withing the counties affected by the rain tax (and mine is not), it was pretty common to choose a fee structure that discriminated against the ruralish landowners who tended not to favor the democratic administration that imposed it, and whose impervious surfaces were not the problem. Cities, the big source of stormwater runoff, should pay; not their peasant farmer class.
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.
Suck up to your readers much, Matt?
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. . .
It's not like Maryland is an under taxed state. And now onto the one thing that Matt really likes about this affair:
Soon to be MD ex-Governor Martin O'Malley
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.
There might be some truth in all this; the rain tax was widely hated throughout the state, especially in the democratic controlled urban areas and their close in suburbs. Those of us farther out didn't like it much just on principles, even though we didn't even pay it, but we tend not to vote the machine anyway. They can't lose our vote; they never had it.

Previous articles on the "Rain Tax"

Do the Rain Tax Boogie
Rain Tax Alternative Stalled
Rain Tax Compromise Reached
Should the Feds Pay the Rain Tax?
Enviros Resent Rain Tax Ruckus
Counties Resistant to 'Rain Tax'
Harford County Cuts 'Rain Tax"
Generic Chesapeake Bay Post

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