Rain Tax 2

In Lenoir City, it will literally be raining money if council follows through with their plan to pass their rain tax or stormwater fee as they call it.

I told you last Monday that council had passed, on first reading, a proposal to implement a $3 per household, per month tax for the rain that falls on their homes and property. This would be to help pay for stormwater management. That residential portion of the tax was expected to generate about $126,000.00 per year for the city to use for stormwater management or anything else they want to use it for. That $3 per month tax was just the tip of the iceberg. 

The big money from the rain tax comes from the taxes the city will collect on all other properties that will be hit by the tax. There are no exemptions. All commercial properties, churches, schools, government facilities everywhere within the city limits will be charged. Forget the $3, all the other facilities will pay the tax based on the square footage of impervious surface they have, roof tops, parking lots and any area that essentially isn't dirt and grass. 

According to the city official I spoke with, the table below shows the calculations for charging the tax that will be added to the non residential property owner's utility bill. City officials estimate the annual collections from the rain tax to be $532,000.00.

0-5,000 sq. Ft. $25  per. month
5,001-35,000 sq. ft. $50  per. month
35,001-70,000 sq. ft. $100  per. month
70,001-100,000 sq. ft. $200  per. month
100,000-200,000 sq. ft. $300  per. month
200,001-300,000 sq. ft. $400  per. month
300,001-400,000 sq. ft. $500 per. month
400,001-500,000 sq. ft. $600  per. month
500,001-600,000 sq. ft. $700  per. month
600,001-700,000 sq. ft. $800  per. month
700,001-800,000 sq. ft. $900  per. month
800,001-900,000 sq. ft. $1,000  per. month
900,001-1,500,000 sq. ft. $1,500  per. month
1,500,001-2,000,000 $2,000  per. month
2,000,001 sq. ft. + $3,000  per. month

I did a few rough measurements using the county property database web site to calculate some commercial and other properties around the city to see how much rain tax will cost them. Oh my.

Walmart $800 per month, Home Depot $600 per month, First Baptist Church $500 per month, Lenoir City High School $700 per month, the Hospital $700 per month. The biggest I saw would be the ADESA Auto Auction which would owe around $1,500 per month.

One question I had was about the areas of the city that has no drainage systems. Would those folks have to pay also? Yep. No exceptions.

Bottom line is, this is nothing more than an unnecessary tax on residents and property owners in Lenoir City. City officials have touted over the last few years how successful they have been in their budgeting and how they have grown their fund balance through careful financial management. At least part of that is true. The fund balance has grown. Last year they added nearly a million dollars to their 4.8 million dollar fund balance, without the rain tax.

Lenoir City officials certainly have the right to tax their residents, property owners and businesses as much as they want but why would they?

There's one point that must be made clear. This "rain tax" or stormwater fee as city officials like to call it, is not mandated by the federal government or congress, it is not mandated by the state of Tennessee. But don't just take my word for it. Here's what the Tennessee Attorney General's opinion is.

S T A T E  O F  T E N N E S S E E
PO BOX 20207
Opinion No. 12-96


1. Is the “storm water fee” charged to customers by some water utility districts required under the Clean Water Act of 1977?


1. There is no express provision in the federal Clean Water Act regarding the setting and charging of storm water fees.

It is a local option tax, passed by the city council just like a wheel tax, sales tax or property tax. And given the mandatory nature of the rain tax, it's essentially equivalent to about a ten cent property tax increase.

This is a very large, new tax on the residents and businesses of Lenoir City and not surprising, the tax can be increased any time.

Council has already voted to implement the tax and will have two more votes. The second vote will be at a special called council meeting on June 5th, 1:00 at City Hall and the 3rd and final vote will be June 26th 7:00 pm at City Hall.

If you are a city resident, property owner or business and would be opposed or support this new tax, you may want to let your city council know.