Could a Stormwater Utility Provide the Right Solution?
Across the United States, stormwater utilities have proven to be a reliable, effective, long-term solution to stormwater pollution and flooding. As of 2019, over 1,700 stormwater utilities exist in 40 states serving local populations ranging from just 88 people up to three million. If your community confronts aging or inadequate infrastructure, water quality problems, flooding, and regulatory compliance issues, a stormwater utility could help.
For more information on what a stormwater utility is, see here.
Comparing Tax-Based Funding vs. User-Fee Funding
TAX-BASED FUNDING (PROPERTY TAX)
- Billing system already in place
- Tax collection process established
- No additional administrative cost
- Not dedicated
- Existing revenue allocated to higher priorities (schools, law enforcement)
- Inflexible: property tax levy capped at two percent growth/year by state law
USER-FEE FUNDING (STORMWATER UTILITY)
- Equitable (fee proportional to service)
- Incentivizes stormwater mitigation by property owners
- Public aversion to new local fees
- Start-up costs (study, billing system)
To provide some context on the main points noted above:
- Equitable—A user fee ensures that property owners pay their fair share based on the amount of stormwater that they create. When stormwater management is paid through property taxes, tax-exempt entities such as hospitals, universities and property owners who do not receive water/sewer bills (large parking lots) pay nothing, placing a higher burden on other property owners. Since the only fee exemption in New Jersey’s legislation is for agriculture, the user-fee concept represents a fairer solution.
- Dedicated/stable/flexible—By law, fee revenue must be spent on stormwater needs and the amount is stable since the underlying basis, impervious coverage, is fairly static. The fee can be adjusted over time if the community changes its desired service level.
- Perhaps most importantly, a stormwater utility encourages all residents to reduce runoff from their property. Since stormwater systems are “out of sight and out of mind,” and public understanding of the associated problem is low, this may be the most compelling argument.