Tax for stormwater and meltwater - Rumia

In response to the growing problem of local floods and an overloaded sewerage system, the municipality of Rumia in Poland introduced a tax system in 2018 which creates disincentives and incentives connected to water retention on private properties. The tax charges private land owners, companies, housing cooperatives, etc. per cubic meter of stormwater that is directed to the sewage system from their land. Thus, private property owners that are disconnected from the sewage system and which keep stormwater on their property do not have to pay any tax. On the other hand, land owners that are connected to the sewage system can receive up to 90% tax relief for retaining water on their land. This has created impacts regarding the unsealing of paved surfaces, construction of nature-based solutions, increases in societal awareness about stormwater management, and - concretely - a decrease the amount of runoff water directed to the sewerage from new investments by about 90%.

Overview

Type of instrument:

Economic and fiscal instruments›Disincentives (e.g. taxes to change behavior, access fees, payments)

Challenges addressed

Water management (e.g. reuse)
Drought and fire risk
Flood risk: pluvial and fluvial / soil permeability

Consideration of nature-based solutions:

The tax system introduced by the Rumia Municipality encourages private plot owners to create nature-based solutions on their land, i.e. stormwater gardens, bioswales, rain barrel for watering trees, bushes etc., infiltration trenches and plots, as well as to increase the area of permeable surfaces. This allows more rainwater to be kept in the ground and decreases the amount of runoff directed to the sewage system, thus improving the conditions of the local ecosystem and reducing the negative effects of droughts and heavy rainfalls. In addition, the taxes also serve to increase social awareness about stormwater management.

Targeted (peri-)urban areas:

Green areas for water management

Urban green space connected to grey infrastructure

Good practice characteristics:

Effective

Sustainable in the long-term

Locally appropriate

Potential to be replicated / upscaled

Policy business case

Governance

Government body/bodies

Initiating body:

Municipality of Rumia

Instrument design:

Details about how the instrument was designed:

The instrument was developed and designed by the Property Management Department of Municipality of Rumia. This department and especially its head had a leading role in the process. However, the concept and the design were discussed and verified with other departments and the employees of municipality.

Involvement of non-governmental actors:

Private sector, corporate, business

Citizens or community groups / NGOs

Type of actor involvement:

Civil society consultation through e.g. workshops, surveys

Instrument implementation:

Type of involvement:

The tax is imposed on all land owners, including private landowners, companies, housing cooperatives, etc. The preparation of the instrument and its implementation created an opportunity to educate and discuss with stakeholders about stormwater, flooding, landscape retention, and the role of nature-based solutions in sustainable stormwater management. The municipality thus made efforts to explain the instrument to these groups, especially regarding why it has been implemented and what the benefits and mechanisms are.

Type of non-governmental actors involved:

Implementation of NBS (e.g. with government funds)

Targeted actors:

Private: household, real estate developer, business , financial

Citizens or community groups (CBOs), NGOs

Financing

Sources of funding:

Public local authority’s budget

Budget:

Less than 50 000 €

Details about instrument financing:

The tax system was created as a part of the municipality's policy framework and was financed from the municipality's budget. The costs include 2 new employment positions and handling of the policy. On the other hand, the tax generates great savings on what would otherwise be necessary sewage system investments and serves to generate income from the taxes which have been paid for the water entering the sewage system from private plots (around €400,000 in 2019). However the main goal of the instrument was not to increase the incomes to municipal budget, but to significantly minimize the amount of stormwater recharged to the municipal drainage system.

Monitoring, evaluation and impacts

Is a monitoring framework in place?:

Did an evaluation take place?:

Achieved outcomes and impacts:

Around 100 objects were disconnected from the drainage system and created solutions to maintain the runoff on their plots, which served to decrease the amount of runoff water directed to the sewerage from new investments by about 90%. The taxes have also increased the level of social awareness of rainwater management and nature-based solutions. Many citizens had no knowledge of these topics before the policy, but as they see a direct influence on their budget, they have begun to invest in nature-based solutions on their properties. There has also been an increase in the amount of new plants and a number of trees have been saved from being cut. Finally, there are new synergies between the tax system and new investments in nature-based solutions by the municipality.

Success factors and lessons learned:

The tax instrument can be considered a success due to its widespread uptake and extensive impacts, but also for its sustainability in terms of generating cost savings as well as funds for the municipality. One success factor is the application across all private land owners, giving all an equal opportunity to save taxes by implementing green measures to avoid rainwater runoff into the sewage system. The biggest challenge were various interpretations of Polish law, which led to numerous lawsuits and appeals from the tax and to ultimately suspend the policy. However, if the policy is successfully defended in the court, this might lead to a change in the Polish law interpretation and new possibilities for other Polish municipalities to create similar policy instruments.

Sources and further information

References

List of references:

https://bip.rumia.pl/a,34582,uchwala-nr-ii212018-rady-miejskiej-rumi-z-dnia-13-grudnia-2018-roku.html

https://uslugiekosystemow.pl/2021/07/23/rumia-motywuje-inwestorow-do-zrownowazonego-zarzadzania-woda-deszczowa/

Photos

Municipio de Rumia