LEWISTON – The City Council raised concerns Thursday about the economic impact of a proposed rain tax, which, if adopted, would be the third in New England.
The system of assessing a separate storm-water fee would charge residents an annual fee, while nonresidential property owners, including nonprofits, would be charged based on their property’s square footage of hard surfaces. Currently, residents and nonresidents are charged for runoff cleanup based on property value, which amounts to approximately $1.4 million in the current budget.
During the workshop, in which there no opportunity for a public hearing, City Council members raised concerns that the rain tax could increase taxes for some commercial and industrial property owners, creating a negative impact on the city’s economic development.
“How are businesses like Wal-Mart going to react to an additional bill?” Councilor Mark Paradis asked. “Will this impact development?”
Mayor Lionel Guay said the nonresident fees didn’t discourage new businesses from coming to Augusta, which was the second city in New England to impose a rain tax.
Other councilors raised concerns that multiple family homeowners shouldn’t be charged more for less square footage.
City Administrator Jim Bennett’s preliminary proposal for the rain tax would reduce the budget by an estimated $1.6 million, creating a fee system that would separate rainwater from the sewage systems.
The fee would generate about $500,000 from residents, annually charging single-family homeowners $30, owners of duplexes $60, and owners of 10-unit apartment buildings $300. Bennett said Thursday the proposal would reduce a resident’s average tax rate by a projected 65 to 70 cents.
Nonresidential properties, however, would be charged anywhere from $227 to $51,350 annually. These commercial and industrial property owners, including nonprofits, would be responsible for generating around $1.3 million to separate rainwater from sewage systems.
Bennett explained that, despite it costing some business owners more, the fee system would create one of the lowest tax rates Lewiston has seen in years, lower than other cities and towns.
Lewiston is facing storm-water construction costs of at least $15 million over the next decade. Lewiston already has spent about $5 million to keep storm water separate from the city’s sewage system – a new federal mandate.
A further discussion on the rain tax will take place at the City Council meeting at 5:30 p.m. on Tuesday, April 25. A public hearing about the tax will be slated for a later date.