Arizona is standing at a critical energy crossroads, and finding a sustainable path forward requires a shared commitment from state lawmakers and county leaders alike. While the state’s current property tax statutes were originally crafted to welcome utility-scale renewable energy, the framework now requires a collaborative update. Under A.R.S. § 42-14155, the state artificially suppresses the valuation of taxable renewable energy and storage equipment, setting its full cash value at a mere 20% of its depreciated cost.
Because of this statutory discount, combined with existing transmission infrastructure, favorable conditions and large areas of suitable land, Navajo County has become an attractive location for multi-billion-dollar energy developers who avoid paying standard industrial property taxes. Meanwhile, rural host counties are left carrying 100% of the long-term infrastructure and emergency response costs required to support these massive projects. This is not acceptable. By working together to amend A.R.S. § 42-14155, we can create a balanced system where growth does not come at the financial expense of local communities and taxpayers.
Working in partnership with all 15 Arizona counties, I recently introduced draft legislative language intended to provide counties with the tax revenue necessary to meet the increasing demands we face in Navajo County. Current provisions under A.R.S. § 11-811 restrict counties’ authority to regulate renewable energy projects. While I understand and share the concerns expressed by constituents regarding solar and wind development, county governments must operate within the limits established by state law. Furthermore, regarding these projects, or any other developments that are permitted uses by statute, I feel it necessary to protect the interests of the taxpayer in Navajo County by introducing legislation that provides the tax resources for our county to successfully operate.
Currently, the state has set an 80% tax discount to renewable energy projects, and counties pay 100% of the services. Public safety, infrastructure maintenance, and administrative oversight, and all that goes into these county services, need to be funded by developers and not the citizens and businesses that make our county great. When one property pays less, everyone else pays more. Fair valuation means tax relief for homeowners and small businesses. There are other entities impacted by this growth. School districts, community colleges, fire districts and other government agencies are currently impacted and have to absorb the costs, which are ultimately passed along to the taxpayers of Navajo County. Simply stated, this is not fair.
This conversation is about a genuine desire to ensure our communities receive a fair return for the land, resources and public services they provide. Right now, many residents have understandable reservations about how the rapid pace of these projects impacts their daily lives and are looking to their local government for answers. If the state is going to mandate, through statute, that we implement these projects, then we must request adequate return to make sure our tax base does not benefit one taxpayer over another.
Let's bring all stakeholders to the table to forge a balanced, equitable solution that protects local taxpayers and powers Arizona forward together.
