`Flush tax' dispute ends

Pentagon to update treatment plants around Maryland rather than pay fee


The U.S. Department of Defense has agreed to spend $22 million upgrading its wastewater- treatment plants throughout Maryland in lieu of paying the Ehrlich administration's "flush tax" -- a move that ends nearly two years of legal wrangling and makes money immediately available to reduce pollution flowing into the Chesapeake Bay.

Under the agreement, which was signed yesterday at a Naval Academy ceremony, the Department of Defense will spend the money over the next four years to upgrade sewage-treatment plants at five of its largest installations: Fort Meade in Anne Arundel County; Aberdeen Proving Ground in Harford County; Fort Detrick in Frederick County; and the naval support facilities in Annapolis and Indian Head.

When the upgrades are completed, the plants will be able to treat 12 million gallons of sewage a day.

State officials say that contribution is far greater than what they would have collected if the Pentagon had agreed to pay the bay restoration fee, commonly known as the "flush tax." The Defense Department's portion of that would be a little less than $1 million yearly.

"This is definitely worth applauding," said Kim Coble, Maryland executive director of the Chesapeake Bay Foundation, as she gazed at a glimmering Severn River filled with midshipmen learning to sail. "The goal of the bay's health was put out there, and nobody debated the importance of it."

Two years ago, it was much different.

Maryland's first Republican governor in three decades championed the fee as a way to cut in half the pollution seeping into the bay, eventually passing what environmentalists consider the most significant waterway-protection law in decades.

The $2.50-per-household monthly fee, combined with what businesses paid, would raise about $65 million annually to pay for the new tanks, pipes and other infrastructure needed to upgrade the largest wastewater plants.

Initially, Gov. Robert L. Ehrlich Jr. wanted septic system users excluded from the bill. But he faced resistance from Democrats over excluding rural Marylanders, and in the end he signed a law that made everyone pay. The anti-tax governor and his staff have long said that the surcharge is a user fee, not a tax, and that no one was exempt from it.

A few months after the law was passed, the Maryland Department of the Environment received word from one of the Navy's lawyers that the service considered the flush fee a "classic tax" and that, as a tax-exempt organization, it would not pay.

Navy lawyers, who were also representing the Army, asked MDE lawyers to prove to them that the charge was a fee, not a tax, and to document their reasoning.

The agreement announced yesterday avoids a protracted legal battle that all sides agreed would have provided little benefit to the bay, where excessive pollution has brought harmful algal blooms and a loss of oxygen that is stressing marine life.

It took nearly two years to complete the deal to protect the environment and the military's tax-exempt status, in part because it was subject to the approval of all three branches of the military and the Department of Justice.

"The fee-versus-tax question brought us together, but the agreement we signed moves far beyond that issue," said Donald R. Schregardus, deputy assistant secretary of the Navy. "We're going to be in the Chesapeake Bay region for the long term. It's really important that we be part of its recovery."

The Department of Defense is a regular polluter of the bay, state records show.

In the past decade, the Aberdeen plant has flushed 5.4 million gallons of partly treated sewage into the Bush River.

The Naval Surface Warfare Center in Charles County has received two federal violation notices, one for washing coal ash into the Potomac River and another for spilling 14 million gallons of sewage.

And Fort Meade, which landed on the Environmental Protection Agency's Superfund list of the nation's most hazardous sites in 1998, has spilled more than 200,000 gallons of raw sewage into the Little Patuxent River and nearby waterways.

"This is another partner that's been a contributor to the problems of the bay but is now coming together to solve the problems," said Ron Guns, deputy secretary of the state Department of Natural Resources.

Along with the sewage-treatment plants on military bases, the Pentagon has several facilities that feed into municipal treatment plants. The military will not pay the flush fee to upgrade those treatment plants because of the other investments it is making.

In addition to the $22 million it plans to spend on the five plants, the Defense department announced that it would commit $3.3 million over the next two years to environmental restoration projects in Maryland, including addressing storm water runoff at bases.

Mary Beth Carozza, Ehrlich's deputy chief of staff, said the governor was not concerned about the semantics of whether the military considers the measure a fee or a tax. He just wanted the Pentagon to pay its share, she said.

"He pushed for this agreement; he pushed really hard," Carozza said.

State and federal environmental officials initially worried that the military's refusal to pay the fee would prompt other federal agencies to argue that they, too, were exempt. That could have been significant in Maryland, which is home to hundreds of federal facilities.

But MDE officials say that only the U.S. Department of Agriculture has inquired about the fee. And that agency, which is much smaller than the Defense Department, is looking to sign a similar agreement.

Kendl P. Philbrick, the MDE secretary, called the Pentagon agreement a big step in the long, arduous process of cleaning up the bay.

"I want to thank [the Pentagon] for doing its part in going above and beyond the parameters," he said. "We're moving forward with a very positive attitude here that these things are going to get done."


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