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» Albany rain tax: How about ‘tiers’?

HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

Albany rain tax: How about ‘tiers’?

Written June 20th, 2016 by Hasso Hering
Mayor Sharon Konopa and the city council listen to a staff explanation of potential rain tax details.

Mayor Sharon Konopa and the city council listen to a staff explanation of potential rain tax details.

Depending on the size of the footprint of their houses, Albany single-family residential water and sewer customers would pay 50 cents more or less than the proposed standard $6.74 monthly storm water utility fee — or rain tax as I like to call it — under a three-tier system proposed to the city council Monday.

Combined with proposed sewer and water rate reductions totaling $4.13 for the average customer, the potential rain tax would be $2.61 monthly for 80 percent of single-family residential customers, or $2.11 for the 10 percent with the smallest houses, or $3.11 for those with home footprints in the upper 10 per cent.

Even though no vote was taken, the council seemed to agree with the idea of imposing the rain tax in three tiers, with the smallest houses paying 50 cents less and the biggest 50 cents slightly more. The council also seemed ready to accept a credit program by which non-single-family properties — such as apartments, commercial enterprises and industries — could reduce their rain tax bills by building city-approved facilities to reduce runoff. Councilors Bessie Johnson and Floyd Collins did not attend the work session, though Collins sent word that he favored a credit program.

The city staff has outlined the proposed storm water utility fee program for the council in a series of meetings over the last year. The council expects to adopt the rates in October or November, and the added amounts would appear on Albany water and sewer bills starting in March and April 2017.

The city wants to raise $1.75 million in the first year of the new program to spend on the storm water drainage system and to comply with tough new conditions of a discharge permit expected from the Department of Environmental Quality. The city staff has projected the annual revenue and spending on storm water would rise to $3 million in five years, with the monthly rain tax charges going up proportionately.

The city, backed up by a Supreme Court decision, says the new fee is not a tax because there are ways people can reduce their storm water fees. But homeowners will have no feasible way to reduce their fees, the way they can with regular utility bills by using less. To me, a fee is the price for a service you ask for, and a tax is something you must pay whether you ask for it or not. So to me, a rain tax this Albany plan will remain. (hh)

 

 



14 responses to “Albany rain tax: How about ‘tiers’?”

  1. Jim Engel says:

    Give it up HH. Our present council would be more inclined to use a bunch of “4-letter” words than ever, ever say TAX!! Until we turn’em all out we’ll just get more of the same!..JE

  2. Kathy Rogers says:

    I say, “Tears”

  3. Gordon L. Shadle says:

    When a coercive monopoly exists where residents are captive to a city government that is the sole provider of a service, does it matter whether the charge for that service is called a “fee” or a “tax”?

    Politically, the city council has good reason to exclude residents from being the final word on this “tax.” Calling it a “fee” ensures that voters will not have a choice on this matter.

    • Bob Woods says:

      Spoken like the true Ramsay Bolton of the radical right.

      A fee is based on the amount of use generated. Of course, the amount of verbal effluent you generate would make your bill higher than anyone else in the city.

  4. hj.anony1 says:

    I just don’t understand all the hand wringing. If it is a federal mandate due to
    Albany resident headcount, what choice is there?

    City could always waste money and sue the federal gov’ment.

    Here is a thought. Get 100% of the population to refuse to pay that “rain tax” portion once March 2017 rolls by. Improbable but a fun hypothetical to ponder. Sure would send a message.

  5. Bill Kapaun says:

    It’s a $6.74 monthly storm water utility fee!
    Just because PROPOSED sewer and water rate reductions totaling $4.13 are POSSIBLE, doesn’t turn it into a $2.61 monthly “FEE”.
    It’s $6.74, $6.74, $6.74……MONTHLY. At least until they raise it again.

    • hj.anony1 says:

      $6.74, yes. Until it isn’t. Exact / more / less, we don’t know until it is set. Shifting funds from other areas makes it appear less and therefore, much more palatable. Again, yes, until it is raised.

      The bickering over “fee” or “tax” title is just a distraction. The real concern, at least for me, is the shifting of revenue from water/sewer. Begs the question: Are WE Paying too much for those services? And if so, for how long?

  6. Dan Freeman says:

    Hmm…I have some mixed thoughts here. First we should acknowledge that the city is responding to their legal obligations as mandated by the Clean Air and Water Act. The Oregon DEQ is adopting and enforcing regulations as proposed by the EPA. As indicated by the council, the content of the permit and its requirements are currently in flux. What is in the permit will not be known until sometime in July and will be adopted in the fall of 2016. So the city has an unknown but expensive obligation they are preparing to engage in and need funding to pay for it. That is it in a nut shell.

    The confusion began when the city decided to form a utility to pay for this ever expansive program. To start with utilities provide services to households and businesses in the community. These households and businesses are the benefactors of the service and must pay for what is rendered. If the benefactor does not want the service they are free to use less. In most cases the benefit is delivered in some measurable quantity or unit of measure.

    In the proposed stormwater utility the unit of measure is elusive. One may ask what am I paying for? The answer is an Equivalent Residential Units (ERUs). What is an ERU? Answer – it is a volume equivalent to 3,200 sq-ft of run-off from an average roof and driveway. How can I save ERUs and reduce my stormwater bill? Answer – you can’t change your usage. If I can’t increase or decrease my usage then is this really a utility or just a tax? Hmm….it feels like a tax.

    Next you may ask who are beneficiaries? After all it does not seem as if the household or business is getting anything. The answer is that the city is paying for your contribution to the community’s environmental regulations and infrastructure. The infrastructure component has always been there but now we get to pay extra for the ever expanding regulations.

    • Ray Kopczynski says:

      “The confusion began when the city decided to form a utility to pay for this ever expansive program…The infrastructure component has always been there…”

      I don’t believe it is as confusing as you imply. As your ending sentence indicates, “…[it] has always been there…” Creating the utility makes it very-very transparent where the funding is/will be coming from and where it is/will be going. Currently, all that information “has always been there” but has been buried inside your water/sewer bill. Now, those bills will be reduced accordingly because of the storm water utility.

      Yes, those costs will be going up over time – as they will be for sewer & water infrastructure. That is a given. For us, and every other city in Oregon. As we have done with sewer & water, we will be getting a 5-year projection every year to see what the estimated costs will be, recommendations for rate structure, and the decisions council will have to make.

  7. ean says:

    There is probably a law against it but it seems like the most equitable way to impose the rain tax would be on property taxes. Assessed value is probably pretty closely correlated with impervious surfaces on lots.

    • Bob Woods says:

      You are correct. Property taxes are highly circumscribed.

      Water, Sewer and now Storm-water are utilities are fee for service. Water based on the amount of water you buy; Sewer based on the amount of sewage you send into the system; and now storm-water, based on the amounts of hard surfaces that cause water to run off your property. All based oln assigning costs based on the amount of use you put onto the systems.

      Property taxes are based on the value of property, not the amount of “use”. Do you really think charges based on the value of your property is more “fair”?

      • ean says:

        Yes I do. If I had a 800 s.f. house with another 800 s.f. of driveway and garage the assessed value would likely be around 100k. If I had a 3,000 s.f. house with a 800 s.f. driveway and garage the assessed value would likely be around 300k. In my scenario you would have about twice the impervious area with the bigger house. Under the proposed rules the smaller house would pay $6.24 a month and the larger one $7.24 a month. It seems like a really regressive tax to me as currently written… or fee I guess you can call it.

        • Bob Woods says:

          Your assessment numbers assume that square footage is how property taxes are determined. They are not. It’s the fair market value, and a smaller high-value “rich” house (on a hill with a view of the Willamette in a nice neighborhood) would be assessed more than a larger “dump” in a run down state.

          A tax can easily be regressive. In your example the numbers you show do not show regression, only progression. To directly address regression, you need to focus on the ability to pay. That typically means using income, net worth or marginal disposable income, to assess the rates, whether we’re talking about individuals or businesses. The problem with that is it’s far more difficult and expensive to run such a system, to collect the $90 bucks a year or so per property you’re trying to collect. You also have to have the statutory authority to do so.

          Everything is a compromise. Go to the Council meeting and make your pitch for what you think is most fair. I guarantee they will listen with respect. But if they choose to do it different, don’t confuse not getting what you want, with not being listened to.

          • ean says:

            The high value rich house on the hill will have a longer driveway. I still think assessed value would be more fair than a relatively flat fee, though the most fair would be to make it a square footage tax. The city already has a GIS database that could be utilized for the task. With 4 worker you could probably tabulate every lot in the city in about a month.

 

 
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