Sen. Gail Bates (MD) talks to Travis Brown at the 2015 American Legislative Exchange Council Conference in San Diego about tax policy changes in Maryland since the election of Governor Larry Hogan. He recently unveiled legislation that fulfills his campaign promise to repeal Maryland’s “rain tax.” Currently, the state requires its largest jurisdictions to charge fees for storm water clean-up.
Yes, you read that right: Maryland literally places a tax on the amount of rain that falls. It’s the only state in the nation to do so, and tax-reform-minded leaders like Governor Hogan rightfully find it outlandish.
“Repealing the rain tax has nothing to do with our commitment to the bay or our desire to control storm water management,” Hogan said. “It has everything to do with my belief, and the overwhelming majority of Marylanders’ belief, that the state should not be forcing counties to raise taxes on their citizens against their will.”
“The rain tax was the straw that broke the camel’s back and it ignited a tax revolution in our state,” he added. Hogan considers the rain tax a “universally despised” tax that made Maryland a national laughingstock.
Governor Hogan knows that a variety of tax cuts must be made to keep Maryland competitive. As my co-authors and I discuss in An Inquiry into the Nature and Causes of the Wealth of States, under the leadership of former Governor O’Malley, Maryland became one of nation’s chief culprits in raising taxes ever-higher. But thanks to legislators like Sen. Bates working together with Governor Hogan, there has been more job creation and growth and Maryland is once again open for business.