Storm Sewer Service Charges – It’s Not Money Down the Drain

As the ability to measure the costs of managing urban storm water improves, so does the potential of reflecting these costs as fees. Increasing cities’ use of storm water service charges may represent a way to soften the generational conflict that will increasingly accompany property taxes, without creating undue heartburn for property owners.

Storm sewer service charges in Minnesota have not been primarily viewed as a tool to encourage dense development or concentration of tax base, but I suggest they could serve this purpose without creating undue burden on landowners and developers. The current property tax system encourages owners not to improve property, while creating a regressive burden for homeowners on fixed or limited incomes.

Using some breed of storm sewer service charges to “buy down” a portion of property tax levy could encourage both denser concentrations of tax base and renovation or new construction of homes and commercial-industrial property. Charges collected are based not on value but on the amount of storm water flowing from the built area into public water infrastructure.

Impervious_2 The graph embedded in this post illustrates a comparison of the amount of impervious surface area for a range of housing types (graph courtesy of Victoria Transport Policy Institute); as the basis for an assessment of charges, the impervious surface area would establish a clear policy signal favoring higher density development (and concentration of tax base), reduced burden on the storm sewer infrastructure and associated public costs, and a lessened reliance on the property tax levy for stable public revenue.

Last, but not least – developers and property owners retain more ability to influence their storm sewer service assessment. Designing new construction with higher density, and minimizing impervious surface runoff (via green roofs, on-site stormwater storage and percolation tanks, permeable parking surfaces or other measures) for both new and renovated buildings serve to reduce storm sewer service charges.

It will serve all of us well to keep our minds in the gutter – and evaluate storm sewer service charges as revenue substitutes for a portion of the property tax levy. Though now a bit dated, the brief, excellent 1998 book Tax Shift speaks to related issues of aligning our tax system with highest and best uses of land.

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