County to prepare energy, hotel tax measures

The Solano County Board of Supervisors voted 4-0 on Tuesday to direct staff to consider increasing taxes on energy companies operating wind turbines, Battery Energy Storage Systems, natural gas extraction, and solar power. The tax would require ratification by voters at the November ballot this year. The board also voted to consider placing a measure that would raise the county's Transient Occupancy Tax from five percent to 12 percent in the unincorporated area.

Solano County currently collects about $56,496 from wind turbines each year. If it had an annual Consumer Price Index increase, it could have generated over $300,000. Four of the county's wind energy projects are owned by SMUD and not taxable under a business license tax. The county is also considering allowing tax increases for Battery Energy Storage Systems, Natural Gas Extraction and Commercial Solar projects.

The wind turbine CPI adjustment and the natural gas well extraction tax would generate an estimated $225,000 annually. If a ballot measure is requested, the board will need to decide by Aug. 4 whether or not it would be placed on the ballot. A general tax would require a simple majority, and a tax for a special fund would require a 2/3 majority of voters. All of the county's major cities are already looking at possible tax increases this November as well.

County staff offered multiple alternatives, noting that the board could consider just an inflation adjustment on the wind turbines, a business tax increase, or neither.

Supervisor Mitch Mashburn said it upsets him when outside interests come into the county and "pillage" Solano's natural resources. "For me, the power companies are one of those," he said, adding that he would like to see the process raise rates and "take a bigger bite" than staff recommended.

Mashburn also said SMUD has wind turbines sitting on non-SMUD property, but asked if the county could recoup funding by taxing those property owners. He said he has no objections to taxes on solar and BESS projects.

"We need to let them know, and we need to make sure that tax is in place," he said.

Mashburn ended his comments by once again calling for higher tax rates on energy providers, calling staff's proposal "modest."

"I don't want modest," he said. "I want something that is more indicative of our residents being supported."

Supervisor Wanda Williams said she would like to see taxes put in place for data center usage before it becomes more widespread in the county.

"We need to be prepared if data centers come," Williams said.

Transient Occupancy Taxes (TOT) apply to lodging stays of 30 days or less. The county expects growth in the unincorporated area in coming years, staff said, and they have identified 12 properties subject to the tax, as well as online sources such as Airbnb. Proposition 218 requires voter approval on any TOT increase. County Staff estimates that this tax increase could create $58,500 annually in revenue for the county.

Mashburn said he also appreciated this proposal from staff, as it would raise revenue without directly raising the tax burden on residents.

"I am shocked to see the disparity between us and everybody else in the region," he said.

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