Legislation Keeps Flush Tax Money At Intended Source

BERLIN -- With a proposal on the table to double, or even triple, the state’s “flush tax,” a tax on septic systems put in place several years ago to preserve and protect the coastal bays and the Chesapeake Bay, a handful of bills have been introduced in the General Assembly to ensure the revenue collected remains dedicated to its intended purpose.

In 2004, state lawmakers enacted the flush tax, essentially a monthly fee on Maryland residents’ water and sewer bills, for the purpose of creating a trust fund for the Chesapeake Bay and the Atlantic coastal bays in and around Worcester County. Revenue collected through the flush tax was dedicated to the cleanup of the bays through wastewater plant upgrades, cover crop funds, septic system upgrades and other projects.

However, in the years since, legislators have continually raided the bay restoration for other purposes. For example, during the 2011 General Assembly session, state lawmakers approved a $290 million transfer from the Bay Restoration Fund and the Chesapeake and Atlantic Coastal Bays 2010 Trust Fund into Maryland’s general fund for other purposes.

This year, Gov. Martin O’Malley’s legislative agenda includes a proposal to double, triple or even quadruple the flush tax in many cases. Based on the recommendations of the Task Force on Sustainable Growth and Wastewater Disposal, a doubling of the flush tax is necessary to address a current funding shortfall for upgrading the 67 major wastewater treatment plants around the state by 2017, as prescribed by the state’s Watershed Implementation Plan.

In simpler terms, Maryland has already raided the bay restoration funds derived from the flush tax to the tune of hundreds of millions of dollars, and now the state is seeking to double or triple the flush tax fee structure for Maryland residents to make up for the shortfall. For the average Maryland homeowner, the flush tax would increase from $2.50 per month, or $30 per year, to $5 per month, or $60 per year. For some higher usage residents, the fee could increase to $9.30 per month, or about $111 per year.

To that end, bills introduced in the current session would prohibit the transfer of funds collected through the flush tax and dedicated to the bay restoration funds to the state’s General Fund, which has been done extensively in the past. The bills introduced by Delegate Wendell Beitzel (R-1A) on the House side and Senator John Astle (D-30) on the Senate side, call for a constitutional amendment that would need to be approved by the voters of the state through the referendum process.

“The state needs for bay restoration far exceed available funding, and to raid the dedicated funding programs for other purposes is deplorable,” said Beitzel this week. “These actions are the fundamental cause for the recommendation to double, triple or even quadruple the flush tax. Now, the citizens of Maryland are expected to pay more to remedy the situation.”

Meanwhile, local Delegate Mike McDermott said he supported the bills, but held out little hope they would pass.

“Those so-called trust funds have been raided too much,” he said. “They take hundreds of millions of dollars from those funds and I don’t think there is any willingness on the part of the Democrats to prohibit that. What I’d really like to see is a bill that identifies what a trust fund really means, because it doesn’t look like most of them have any idea.”