Governor Gavin Newsom’s proposed state budget this week contains a financial olive branch intended to help resolve a dispute between Kern County and the governor over the economic and fiscal impacts of his administration’s energy policies.
Newsom’s budget plan would commit $450 million over three years to a community resilience fund that received $600 million last year. No money has been allocated, but Kern is seen as a strong contender due to the toughness of its economy and tax base from the accelerating oil and gas phase-out introduced by Newsom.
Speaking in Lamont on Tuesday, the governor said he was “aware of the property tax issue” that was raised by county officials who feared the administration’s oil crackdown could reduce the value of properties. Kern oil properties, producing many of the largest tax bills in the county.
Newsom’s reference to the Community Resilience Fund reflects his administration’s view that the best way for Kern to offset lost oil-related revenue is likely to continue initiatives envisioned by the county’s B3K Prosperity economic development collaboration. . The widespread effort identified the region’s top job-creating “opportunity industries” as renewable energy, aerospace, precision manufacturing, business services and general entrepreneurship.
A related issue is the state property tax exemption on solar farms that has cost Kern about $100 million in lost revenue over the past decade or so. County officials have discussed the possibility of suspending approval for large-scale solar projects unless the governor stops his attacks on the local oil industry.
The governor nearly promised on Tuesday that Kern would receive substantial sums from the resilience fund, saying the county would “benefit disproportionately” from what he called “filling” the fund from property taxes lost to oil.
Newsom also mentioned his proposal for $200 million in state money to pay for plugging abandoned wells, $15 million to train people for the job, and a $50 million fund to support displaced oil workers. – “all for the purpose of supporting here in Kern County and the wider region.”
His office later said by email that starting in the 2023-24 fiscal year, the resilience fund would make money available to “stabilize local governments as local economies adjust to transitions from economic labor caused by climate change and other factors”.
A spokesperson for the governor added that legislation will be introduced to make local government budgets more sustainable to help local entities that demonstrate their commitment to “advancing a more climate-resilient local economy by leveraging investments in climate technology industries” while developing training partnerships. and “just transition” workforce opportunities.
The administration is still finalizing guidelines for the disbursement of money from last year’s community resilience fund. Kern has been designated as its own region, but there is no guarantee that it will receive any part of the fund.
Kern chief administrative officer Ryan Alsop stressed in an email Wednesday that the budget proposal is just that: details won’t be worked out for months and its future is uncertain.
Alsop wrote that he was glad the governor mentioned the impacts of his administration’s energy policy on Kern. He said the burden of California’s transition to cleaner energy “cannot come at the expense of or squarely on the backs of the people who live and work in our great county.”
Alsop noted that Kern is California’s top solar power producer, but does not benefit much financially due to the state’s property tax exemption.
“We call on the Governor to lead the charge with the State Legislature to redress the unfair burden placed on Kern County residents as a result of the solar tax exclusion,” he wrote, “and we urge that much greater attention be paid to the extraordinary and unprecedented impacts its energy transition will have on the people of Kern County.”
He added that he looked forward to working with the Newsom administration and coming to a better and more detailed understanding of the governor’s plan.