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Newsom's budget plan tries to make peace with Kern

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Gov. Gavin Newsom addresses the media Tuesday in Lamont as Assemblyman Rudy Salas stands in the background. Newsom was in Kern County to discuss expanded health care for undocumented immigrants.

Contained in the state budget Gov. Gavin Newsom proposed this week is a financial olive branch intended to help resolve a conflict between Kern County and the governor over the economic and tax revenue impacts of his administration's energy policies.

Newsom's budget blueprint would commit $450 million over three years toward a community resilience fund that got $600 million last year. None of the money has been allocated, but Kern is thought to be a strong contender because of how hard its economy and tax base will be hit by the oil and gas phase-out Newsom introduced and is accelerating.

Speaking in Lamont on Tuesday, the governor said he is "mindful of the property tax question" that has been raised by county officials worried the administration's oil clampdown will slash the value of 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 probably the best way Kern can make up for the lost oil-related revenue is by pursuing initiatives envisioned by the county's B3K Prosperity economic development collaboration. The broad-based effort has identified the region's top job creation "opportunity industries" as being renewable energy, aerospace, precision manufacturing, business services and entrepreneurship in general.

A related issue is the state's property tax waiver on solar farms that has cost Kern an estimated $100 million in forgone revenue during about the past decade. County officials have discussed the possibility of halting approval of large-scale solar projects unless the governor ceases his attacks on the local oil industry.

The governor all but promised Tuesday that Kern would receive substantial sums from the resilience fund, saying the county would "disproportionately benefit" from what he called the fund's "backfilling" of property taxes being lost to oil.

Newsom also mentioned his proposal for $200 million in state money to pay for plugging of abandoned wells, $15 million to train people for such work and a $50 million fund to support displaced oil workers — "all with an eye to support here in Kern County and the broader region."

His office said later by email that, starting in fiscal 2023-24, the resilience fund would make money available to "stabilize local governments as local economies adjust to economic workforce transitions 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 a commitment to "advancing a more climate-resilient local economy through harnessing investments in the climate technology industries" while also developing training partnerships and "just transition" workforce opportunities.

The administration is still finalizing guidelines for disbursement of last year's community resilience fund money. Kern has been singled out as its own region, but there is no guarantee it will receive any part of the fund.

Kern Chief Administrative Officer Ryan Alsop emphasized in an email Wednesday that the budget proposal is just that: Details won't be fleshed out for months and its future is uncertain.

Alsop wrote that he was pleased the governor made mention of the impacts his administration's energy policy have on Kern. He stated the burden of California's transition to cleaner energy "cannot be done at the expense of, or squarely on the backs of, the people who live and work in our great county."

Alsop noted Kern is California's leading producer of solar power but that it doesn't benefit much financially because of the state's property tax exemption.

"We're asking for the governor to lead the charge with the state Legislature to fix the unfair burden placed on Kern County residents due to the solar tax exclusion," he wrote, "and we're urging much more careful consideration be given to the extraordinary, and unprecedented, impacts his energy transition will have on the people of Kern County."

He added that he looks forward to working with the Newsom administration and to coming to a better and more detailed understanding of the governor's plan.