Kern County is a world energy capital. For decades, it has been dominated by the oil and gas industries, with a smaller sector of hydroelectric generation. In more recent years, renewable energy producers, including wind and solar, have emerged as local giants.
While we have cause to celebrate this abundance of power, we now must navigate around the tensions caused by the state’s new priorities to transition California away from fossil fuels and to green energy. Kern has been left holding the financial bag in this effort.
State policies are focused on phasing out the production of oil, which primarily is extracted from Kern County fields. Most recently, the state has targeted ending extraction methods, such as fracking.
State goals to idle one of Kern’s primary sources of energy deprive the region of wealth, jobs and tax dollars. It not just troublesome, it’s galling. The state’s support for alternative energy development is causing Kern to assume more than its fair share of the financial burden.
Prominent in this inequity is the state’s law to encourage solar energy development. It requires land used as sites for large commercial solar plants to be taxed based on its undeveloped value, rather than its commercial value.
According to county officials, the solar industry contributes only about $1.5 million a year to fund local government services. That is about $20 million less than it would contribute without the tax break it now receives. By comparison, the combined oil and gas industries contribute about $200 million a year to fund local government.
Adding insult to injury is the fact that most of the solar energy generated in Kern County is being sold at a tax-supported discounted rate to customers in Southern California and elsewhere in the state. Kern residents benefit from neither the taxes that should be paid by solar plants, nor the discounted energy they generate.
The state-approved “property tax exclusion” was supposed to sunset in 2014, but was extended by the Legislature and governor until the end of 2024. The continuing drumbeat to support the development of alternative energy sources likely will lead to the tax break being extended again.
Kern County supervisors are demanding that the solar industry property tax break be ended in 2025. Otherwise, they threaten to impose a local fee that they say may drive the industry out of Kern.
We get why supervisors are all pumped up and shaking their fists at Sacramento. This situation is not fair. If state officials want to phase out fossil fuels in favor of solar, require the entire state to shoulder the financial burden.
Kern County’s state legislators must lead efforts to find a more equitable taxing plan.
This is not the first time Kern has been caught in the crossfire and hurt financially when the state’s environmental goals have clashed with one of Kern’s primary industries.
In the 1960s, environmentalists grew alarmed as they watched California farmers selling off their prime agriculture land for urban and industrial development. Fearing the nation’s breadbasket was in danger of disappearing, they pushed policies to block the conversion of farms into housing tracts and factories.
John Williamson, who represented Kern County in the state Assembly from 1959 to 1967, emerged as a savior. He authored legislation that bears his name, the Williamson Act, or formally labeled the California Land Conservation Act of 1965. This legislation is relevant to the present solar tax dispute.
The Williamson Act today protects about 16 million acres of California farmland — about 7 million in the San Joaquin Valley, including in Kern County.
Through Williamson’s leadership, a way was found to accomplish the state’s goals of protecting prime agriculture land by giving farmers a property tax break and reimbursing counties for the tax loss.
Over the decades, there have been glitches, with various governors and Legislatures trying to renege on the state’s obligation to reimburse counties. But most will agree the program has been successful.
Rather that beating their chests and spoiling for a fight, Kern County supervisors and Kern’s state legislators should emulate Williamson’s leadership.
Look for a way to continue supporting Kern’s solar industry, while sharing the financial burden with the entire state.