Rain Tax 7

At last Monday's Lenoir City council meeting, I watched in total disbelief as first one than another then another until a majority of council persons, strongly encouraged by Mayor Aikens, implemented a massive Rain Tax on every person, business, non-profit, church and school within the city limits. Councilman Bobby Johnson Sr. was the lone holdout who would not support the tax. This tax will be a small financial burden on residential property, a big financial burden on most businesses and a huge financial burden on churches, schools and non-profits.

Individually, none of those who supported the Rain Tax would ever do anything to harm their neighbors, friends and family members. However, collectively as elected officials, their vote for the tax does just that. It will financially harm their friends, there family members, their churches, civic organizations they're members of and every business in the city. Yet, no one could give any logical reason to implement the tax.

During the meeting, one council member even mentioned the drinking water crisis in Flint Michigan and how the Lenoir City doesn't want to get into that problem. Well, the Rain Tax has absolutely nothing to do with drinking water contaminated by lead pipes as was the Flint issue. Then there was the scary stories from Chattanooga and the massive fines levied there. Of course, that was for raw sewage flowing into the Tennessee River. This tax has nothing to do with sewers. Any time you hear elected officials start using the fear factor to push their agenda, red flags should go up. 

The simplest and most obvious way to see that the Rain Tax is a scam is to look at the "Storm Water Utility Fund" budget just adopted. Only $50,000.00 of the expected $532,000.00 in Rain Tax revenue is budget for drainage and storm water. That's less than 10%. The vast majority of the new budget will be spent on current and existing employees and staff. If this was really about upgrading, repairing and modernizing the stormwater system, wouldn't there be a lot more of the budget dedicated for that purpose? Please go look at the budget yourself below.

Lenoir City Storm Water Utilities Fund (budget)

Why Not A Property Tax Increase Instead?

The reasons are many. No politician ever wants to support or pass a property tax increase. That can be a political death nail. But in this case, the Rain Tax will generate far more new revenue than even a moderate property tax increase would. More importantly to city officials, the Rain Tax will get everyone. With a property tax increase, the schools, churches, non-profits and other originations would be exempt thus, lowering the city's revenue stream. The Rain Tax is also much better for landlords. The Rain Tax will be collected by LCUB from renters on their utility bills relieving landlords from increasing rent to cover a property tax increase.

Also to clear up another misconception, it was mentioned several times at last Monday's meeting, as to blunt the blow of the Rain Tax, that city officials had actually lowered the property tax rate. The insinuation was to make folks think that their property taxes went down. This is not true. Yes, the property tax rate did go down by seven cents, but your taxes will not likely go down.

Loudon County and all the cities within are on a four year reappraisal cycle. That means every four years, all property is reassessed and given new values. Most all properties will increase in value in that four years. Under the state law, known as the Truth In Taxation Law, local governments can not use reassessments to collect any additional property taxes. So, if property values go up, the property tax rate, by law, must come down so the city will still collect the same property tax revenues as the year before. So, to try to make folks think their property taxes will be going down - not true.

Another great benefit of the Rain Tax, over property taxes, is that the rain tax will be collected every month instead of once per year. Quick and instant revenue for the city.

By adding a brand new tax on city residents, city officials now have another way to tax their residents in addition to any future property tax increases. The myth of the Rain Tax being mandated by the state or federal government was exposed rather quickly, but to be very frank, it appears officials fully intended to blame the passage of the tax on others instead of themselves. It would be the same as if county officials claimed that since the county has to maintain the roads, they must pass a wheel tax.

Who's Exempt From The Rain Tax?

According to the mayor and council, no one is exempt from the tax. This is flatly wrong. Not only are there many residents of the city who must be exempt from the tax, the law also requires that anyone who constructs facilities to retain and control the quantity of storm water runoff SHALL have their tax adjusted. (Down)  

Tennessee Code Annotated  68-221-1107.  Facilities user's fee.

  (a) ......Persons whose storm water runoff is not discharged into or through the storm water or flood control facilities, or both, of the municipality; and owners and/or operators of agricultural land, in the municipality, upon which the owner and/or operator conducts activities that enable the owner and/or operator to satisfy the requirements of a qualified farmer or nurseryman
shall be exempted from payment of the graduated storm water user fee authorized by this section. The fee structure shall provide adjustments for users who construct facilities to retain and control the quantity of storm water runoff.

Not only does state law provide exemptions and adjustments, the ordinance passed and adopted by the city also requires exemptions and adjustments.

From Lenoir City Ordinance Adopted 6/26/17

“Users whose stormwater runoff is not discharged into or through the stormwater and/or flood control facilities of the municipality shall be exempted from the payment of the graduated stormwater user fee authorized by this section.” 

 “The fee structure shall provide adjustments for users who construct facilities to retain and control the quantity of stormwater runoff.”

Given that a large portion of the residents who live in the city have no storm water or flood control facilities, they shall be exempt from the rain tax. The law is very clear and simple. An argument could be made that the city has no storm water or flood control facilities along Hwy. 321. All the storm water or flood control systems on Hwy. 321 are actually owned and maintained by the Tennessee Department of Transportation, TDOT.

Section 3, Definitions, of the model ordinance from MTAS also defines what Exempt Property Means.

(5)       [“Exempt property” means all properties of the federal, state, county, and city governments, and any of their divisions or subdivisions, and property that does not discharge stormwater runoff into the stormwater or flood control facilities of the municipality.] The Lenoir City Ordinance added their own language to the ordinance. (i.e., Undeveloped parcel in their undeveloped state.)

While the law is clear that anyone whose rain water runoff  is not discharged into or through the city's stormwater and/or flood control facilities must be exempt and adjustments must be made for those who have their own storm water control systems, my guess is the city plans to ignore that section of the law that allows them to adopt the rain tax. I'm sure it will be up to property owners to take their request for exemption or adjustment. And in reality, if the city wanted to make exemptions for churches, schools, nonprofits or anyone else they could. This is a local tax, passed locally and collected locally with all revenues going directly to the city. They could structure it however they wanted.

The adopted Rain Tax is not forward thinking by city officials, it is not being proactive, it is not mandated by any other government agencies. It's nothing more than a massive tax increase on all city residents, businesses, schools, churches and non-profits. No one should be fooled in thinking any other way. It's nothing more than an additional $44,333.00 of tax revenue going into the city coffers every month that will be spent on everything except stormwater and flood control.

You folks, have been had.