New Jersey's Stormwater Utilities Are a Funding Source for Flood Infrastructure

Rising flood risk is putting $277.7 billion in New Jersey property value and $3.2 billion in annual tax revenue at risk, according to Rebuild by Design, a research and advocacy group focused on climate resilience. “Communities across New Jersey know that when it rains, it floods,” says Allison McLeod, Interim Executive Director of New Jersey League of Conservation Voters (LCV). 

New Jersey is the most densely populated state in the country. It’s also, in McLeod's words, “constantly under development, with an affordable housing crisis. All of these things are happening at the same time.”

New Jersey’s geography puts all that development in close quarters to a lot of water. “We're obviously coastal, but we also have incredible riverine networks here,” she says. “We have great water resources”—protected streams, freshwater wetlands, and coastal wildlands.

But when dense populations overlap with watersheds, previously absorbent landscapes tend to get paved over. McLeod says that New Jersey has more paved area per capita than most of the country, and now even run-of-the-mill rainstorms are causing road closures, storm drain damage, and property damage.

Facing a flood crisis, the state is rolling out a policy tool to solve it: the stormwater utility, which works much like a water or electricity utility. Stormwater utilities charge property owners by how much stormwater they “use”—how much runoff they send into the system—and use that money to fund improvements to stormwater infrastructure. By shifting the financial burden onto the physical footprint of development, the model offers a blueprint for how local governments can price climate risk into the structures that are exacerbating it—both funding and incentivizing resilience. 

Stormwater Utilities: Charge Property Owners for the Runoff They Send Downstream

"What a stormwater utility says is: based on the amount that you contribute to the stormwater problem, you should have to pay to help the solution," says McLeod.

In 2019, a coalition including New Jersey LCV pushed through the Clean Stormwater and Flood Reduction Act, which gave towns the option to fund stormwater management the same way they fund electricity or water: as a metered utility.

The stormwater fee is calculated from a property owner’s impervious cover, meaning any surfaces that prevent rain from soaking into the soil, like rooftops, driveways, sidewalks, and parking lots. A big-box store with acres of pavement pays more than a homeowner with a small yard. 

“It is an equitable solution because it is really a ‘polluters pay’ principle,” says McLeod. You pay for what you use, meaning that “if you use less, you pay less,” says McLeod. “This incentivizes sustainable stormwater management, whether it's a green roof or a rain barrel or pervious pavers.” Reduce your runoff, and the bill drops accordingly.

The money raised through the stormwater utility goes towards stormwater projects alone. McLeod says this is part of what makes the model work politically: Residents can watch the fee they're paying turn into a fixed pipe or a redesigned retention area within a year or two, rather than waiting for a capital budget cycle to catch up, which can take years and years. “In New Jersey for water infrastructure, we have areas that still have wooden pipes, or even clay,” says McLeod.

Stormwater utilities are not new, nor are they unique to New Jersey. There are over 2,000 of them in 42 states across the country. But New Jersey has been establishing them in rapid succession. Four New Jersey towns have set one up since 2019, and more are watching closely to see if it works.

Launching a Stormwater Utility Starts With Mapping Every Property's Pavement

Raritan Township established its stormwater utility in June 2025. John Tully, who supervises the utility, said the township's motivation was straightforward: “We felt that it was the best way to assess the cost in a fair and equitable manner.” So far, they’ve been able to fund improvements to the township's Department of Public Works facility and Wood Recycling Composting facility. 

The town of Maplewood adopted its utility in December 2024. “It became clear to us that there should be a true cost for the amount of runoff a property is sending to the stormwater sewer,” says Maplewood Mayor Victor De Luca. “By setting up a separate utility, the town can ensure that all properties, even those not included in the property tax base, like churches, schools, and government agencies, are paying their fair share toward the improvement of the stormwater collection system.” 

The foundational task, common to every new utility, is figuring out exactly how much impervious surface sits on every parcel in town. Maplewood was helped by a stroke of good timing: The New Jersey Department of Environmental Protection (DEP) funded an engineering consultant to map the town's impervious surfaces at no cost, using public maps available from the DEP. “Any town considering a stormwater utility should have the technical capacity or be able to purchase the capacity to manage the GIS maps from the DEP,” says De Luca.

In its first year, Maplewood collected more than $800,000 in fee income, which went toward fixing a failing collection system on private properties, replacing public pipes and outlets, street cleaning, catch basin repairs, and design work for larger projects planned for 2026 and 2027.

Both towns have incentives on the books that encourage residents to shrink their impervious footprint by giving them discounts if they install absorbent elements like rain gardens, rooftop vegetation, and porous pavers. In Maplewood, Mayor De Luca has seen a trickle of residents starting to cash in the credits. The town also offers a one-time $20 credit to homeowners for rain barrels, and De Luca hopes to do more work with large property owners to get them to consider reducing their impervious surface area. 

How a Town Talks About the Fee Affects Whether Residents Accept It

Ask either official what advice they’d give a municipal leader who wants to raise funds for stormwater management, and the answer is to pursue a stormwater utility, emphasize flood risk, and nail the messaging early. 

“Communication with all stakeholders, public, county, schools, etc., is key,” Tully says. “Don't underestimate the political side of an additional fee.” Tully also advises municipalities not to underestimate how much outreach is required. “We provided multiple direct mailings advertising three public meetings and upcoming bills, and we still had many residents indicating they had no idea what was happening.”

De Luca learned from an initial branding mistake: “When stormwater utilities were first proposed, the tag of ‘rain tax’ was widely promoted,” he said. “I think this dissuaded some local officials from considering moving ahead.” His advice is to frame the pitch around the storms that are increasingly hitting New Jersey hard. “Mayors will find that their constituents understand that the climate is different and flooding is a growing concern. I think being able to craft a message of future-proofing a stormwater collection system will resonate with the public.” 

Proactive Infrastructure vs. A Deferred Crisis

Local governments are already paying for extreme weather; they are just often doing it on the back end, through emergency repairs and higher insurance premiums. 

Every dollar a stormwater utility spends on a fixed pipe or a redesigned retention basin is a dollar that didn't get spent on an insurance claim. Insurers pricing flood risk and investors underwriting property in flood-prone areas should care about the difference. A town with a funded, working stormwater system is a better bet than one waiting on the next capital budget cycle.

“Begin by evaluating your town's needs for repairs and upgrades to the stormwater collection system,” De Luca advises. “It is likely that you are already spending capital funds for such work or deferring action until you have a serious problem."

By shifting the cost to the properties generating the runoff, towns like Maplewood and Raritan are proving that climate adaptation can be built into the municipal ledger. “Your residents will get it,” says Mayor De Luca, “because they probably are experiencing more flooding in places that have never been affected before.”

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