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Court rules that “rain tax” is a fee, not a tax

The City of Lewiston received a favorable decision March 27 from the Maine Supreme Judicial Court—Maine’s highest court—concluding that the city’s stormwater utility fee is not an illegal tax, as argued by Robert R. Gladu regarding his property at 475 Pleasant St.

The Supreme Judicial Court decision also upheld a May 18, 2011 Maine Superior Court ruling on the same issue.

In 2011, the City of Lewiston had taken Gladu to Maine Superior Court seeking payment of overdue stormwater utility fees, which are often referred to as a “rain tax.”The court issued a decision in favor of the city.

In a 17-page opinion, the court backed the city’s 2006 ordinance and its stormwater fees, rejecting Gladu’s claims that the city had no legal right to impose or collect those fees and such fees constituted a tax.

Specifically, the Superior Court confirmed the legitimate purpose of the stormwater utility as funding expenses necessary to provide stormwater management services to comply with federal and state water-quality requirements.

In 2011, the court also upheld the city’s use of “impervious surface” as the basis for determining the fee applied to a property. As a result, the court issued a judgment for the city for the unpaid fees, interest, penalty and a portion of the city’s attorney fees.

Gladu appealed that decision to the Maine Supreme Judicial Court.

The Maine Supreme Judicial Court decision fully affirmed the lower court’s decision and the city’s position since the adoption of the stormwater utility ordinance in 2006. The court fully considered all tests required to decide whether the utility fees are in fact fees and not a tax as contended by Gladu.

Indeed, the Lewiston City Council had worked closely with its lawyers, Brann & Isaacson, to ensure that the fees met those legal standards. The Maine Supreme Judicial Court also affirmed the decision of the Superior Court in awarding a civil penalty, attorney fees and other costs.

Other Lewiston property owners who have not paid their stormwater utility bills can expect to be contacted by the city in the near future to bring their accounts current.

 

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