Tax Me, Please
County explores the hottest trend in clean energy financing.
Thursday, July 2, 2009
Sign up for higher property taxes. It’s good for your wallet, your county and the planet.
That’s the message from supporters of a local “clean energy revolving fund,” a pot of money used to finance local energy efficiency and renewable energy projects.
The idea is to knock down the most common hurdles to small-scale energy improvements: the high up-front cost and the concern that the investment might not pay off before selling, explains Jason Burnett, a former associate deputy administrator of the U.S. Environmental Protection Agency and founder of the new Marina-based Burnett EcoEnergy.
With a revolving fund in place, property owners who agree to higher property taxes get up-front money for greenhouse-gas-curbing projects like appliance replacements, lighting retrofits, weather-stripping, window upgrades and solar panel installations.
Those improvements, in turn, lead to gas and electricity savings along with increased equity. If the building’s owner decides to sell, the obligation to repay the loan transfers to the new owner.
“It’s a voluntary program, and it’s a tax,” Burnett says. “If done correctly, the energy savings will more than pay for the increased property taxes.”
Similar programs have been implemented in Sonoma County, Berkeley and Boulder, Colo., Burnett says. A draft analysis by county staff suggests Monterey County could claim at least $45 million if it partners with the state on a clean energy fund – and that could trigger an additional $15 million in federal stimulus money.
The political framework for the program stems from AB 32, the 2006 state law requiring steep reductions in greenhouse gas emissions. Last year the Legislature adopted AB 811, a complementary bill allowing California municipalities to establish the clean energy funds.
Counties can finance their funds through the bond market, using future tax receipts as collateral, Burnett says: “It’s revenue-neutral from the perspective of the county, and it’s voluntary from the perspective of the property owners.”
The fund would also generate green jobs, he notes.
The Monterey County Board of Supervisors passed a motion March 31 to form a working group on a local clean energy fund. On June 23 Burnett, a member of the working group, gave a brief presentation on how the fund would work. (The Supes didn’t vote on it.)
Although AB 811 allows any jurisdiction to establish a clean energy fund, Burnett says, it would be easiest for the county to take the lead. “There are economies of scale,” he says. “Rather than each city in Monterey County developing its own program, it would make sense for all the cities to get together with the county and develop one program.”
Supervisor Jane Parker agrees. “The cities are hoping the county will take the kind of leadership role that will allow them to get on board,” she says. “Just because everybody thinks this is a good idea doesn’t make it easy to do.”
Local officials seem to be rallying for it, too. Burnett presented the Supes with letters of support from 10 Monterey County mayors – representing every city but Soledad and Sand City – and from Rep. Sam Farr (D-Carmel).
A program could be up and running as early as October, Burnett says.