Washington State Association of Counties Exposes Property Tax Challenges in Clean Energy Development

[Olympia, WA – December 21, 2023] – As Washington State accelerates its commitment to achieving 100% clean energy and reducing greenhouse gas emissions, the Washington State Association of Counties (WSAC) has released a groundbreaking report uncovering critical challenges within the property tax assessment system that directly impact the property taxpayers in the communities in which the projects are built and the development of future projects needed to meet the state’s goals for clean energy to battle the impacts and causes of climate change.

The Clean Energy Property Tax Report exposes a property tax burden shift from clean energy production facilities to other private property taxpayers that results in higher tax bills for local residents and businesses. It also provides a comprehensive analysis of the root causes behind the property tax issues faced by counties hosting clean energy projects and proposes innovative solutions to support sustainable clean energy growth while optimizing benefits for rural communities.

Key Findings: Unveiling the Challenges and Implications

The report highlights six pivotal findings that shed light on the pressing concerns and implications for counties grappling with the surge in proposed clean energy developments:

1. Increased Clean Energy Development: Washington State's ambitious climate policies have led to a surge in proposed clean energy production facilities in rural counties. However, much more will be needed to meet the state’s goals.
2. Inconsistent Property Tax Assessment: The state's property tax assessment process for centrally and locally assessed clean energy projects results in inconsistent assessed values, posing challenges for fair taxation.
3. Tax Burden Shifts: Washington's personal property tax laws create tax burden shifts over time from clean energy projects to other property taxpayers within the same taxing districts, placing an additional tax burden on existing property taxpayers.
4. Fluctuating Assessed Values: Clean energy project assessed values experience significant fluctuations annually due to assessment methods and over longer periods owing to personal property depreciation. As a result, over half of their property tax responsibility has been shifted to other taxing district property taxpayers, amounting to millions of dollars in property tax shifts.
5. Escalating Problem: Without proactive changes, the existing property tax burden shifts from clean energy projects to other taxpayers is likely to worsen as the state pursues its climate and environmental goals.
6. Mitigation Strategies: Some states have created strategies to prevent or mitigate property tax shift issues associated with clean energy projects while ensuring additional benefits to hosting communities.

Addressing the Challenges and Moving Forward

The WSAC report not only identifies these critical issues but also lays out potential solutions to ensure a fair and sustainable environment for clean energy development. Recommendations encompass reforms in property tax assessment processes, legislative amendments to address tax burden shifts, and strategies drawn from successful models in other states.

“Our report underscores the urgent need for comprehensive reforms to address the complexities surrounding property tax assessment in clean energy development,” remarked Eric Johnson, WSAC Executive Director. “By implementing equitable taxation practices and learning from successful models, we can foster a conducive environment for clean energy growth while ensuring fairness and maximizing benefits for all stakeholders involved.”

With a deep commitment to advancing sustainable clean energy solutions, the Washington State Association of Counties remains steadfast in its dedication to fostering an environment where clean energy projects thrive, benefiting communities across the state.

For more information, the full report can be accessed here and the one-pager summary can be accessed here.

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Media Contact:

Paul Jewell
Policy Director, Washington State Association of Counties
(360) 489-3024
PJewell@WSAC.org

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Who We Are – Washington State Association of Counties

Created in 1906, the Washington State Association of Counties (WSAC) is a voluntary, non-profit association serving Washington’s 39 counties. WSAC members include elected county commissioners, council members, and executives.

WSAC provides various services to its member counties, including advocacy, training, workshops, and a forum to network and share best practices. WSAC also serves as an umbrella for affiliate organizations representing county road engineers, local public health officials, county administrators, county planners, emergency managers, county human service administrators, solid waste managers, clerks of county boards, and others.