Williamson Act faces a renewed budgetary threat

Issue Date: January 26, 2011
Steve Adler

As rural landowners watch with growing apprehension, county supervisors around the state wrestle with options available to them as state support for the Williamson Act farmland conservation program has been eliminated from the new governor’s budget proposal. Analysts said one option—a new alternative for the Williamson Act sponsored by the California Farm Bureau—could attract additional interest among counties if the Legislature approves the governor’s plan.

Counties have already been struggling with depleted reimbursements from the state for tax revenue lost to the counties through Williamson Act contracts. In his budget plan, Gov. Brown proposes in the current fiscal year to eliminate the $10 million General Fund appropriation for the Williamson Act reimbursements, known as subventions, and that the state provide no funding in 2011-12.

In his announcement, the governor also called for the repeal of the California Community Redevelopment Law and suggested that increased property taxes resulting from that repeal could help counties continue the Williamson Act program on their own. However, most rural counties don’t have redevelopment agencies.

In his budget message, Gov. Brown stated: “The budget eliminates the current-year appropriation for Williamson Act subventions and does not provide ongoing state funding. The program will thus be a local program. Funding provided from the redevelopment agencies tax shift could help counties continue this program on their own.”

The governor’s proposal marks the latest budgetary threat to a program that supporters say has helped farmers and ranchers stay in business. The act, which was created 45 years ago, protects more than 16.5 million acres of California farmland.

Farmers who enroll in the program enter into 10-year or 20-year contracts with the county, by which they promise to keep the land in agriculture rather than opting for some other land use, such as commercial or residential development. In exchange, the land is taxed based on its agricultural income, its acquisition value under Proposition 13 or its current market value, whichever is lowest. The contracts automatically renew each Jan. 1, unless counties vote not to renew them.

In order to keep the program going, supervisors in eight counties so far have adopted a Farm Bureau-sponsored law, known as Senate Bill 863, which was signed by Gov. Schwarzenegger last fall.

SB 863 went into effect last October. It allows counties, with certain restrictions, to voluntarily implement new contracts that are 10 percent shorter in return for a 10 percent reduction in the landowner’s property tax relief.

John Gamper, California Farm Bureau taxation and land use director, explained that SB 863 was created to help counties recoup lost state funding and stay in the Williamson Act program.

“Farm Bureau sponsored this bill in order to save a very successful land conservation program that not only provides farmers with significant property tax relief, but also the certainty that they can continue to farm without incompatible, non-farm uses coming in next to them,” Gamper said.

Counties that have implemented the SB 863 program include Kings, Madera, Mendocino, Merced, Shasta, Stanislaus, Tulare and Yolo.

Gamper said there is a possibility that more counties will vote to adopt SB 863 following the new governor’s budget message.

“Some counties that threatened to do mass non-renewals of Williamson Act contracts and who did not implement SB 863 did so primarily because of political pressure to wait one more year to see if the new governor would restore the funding for the subvention program,” Gamper said. “Without SB 863 it would have been easier to simply non-renew since there were no other options, in which case growers would have only four years of property tax relief and starting in the fifth year of the non-renewal process landowners would be faced with huge property tax burdens.”

Twenty-two counties have considered the SB 863 program but opted not to implement it: Amador, Butte, Fresno, Humboldt, Kern, Lake, Mariposa, Modoc, Napa, Nevada, Placer, Sacramento, San Diego, San Joaquin, San Luis Obispo, Santa Clara, Santa Cruz, Solano, Shasta, Sierra, Tuolumne and Ventura.

Supervisors in Imperial County voted last year to non-renew all Williamson Act contracts.

The remaining counties have not yet taken action.

While SB 863 provides some immediate support to counties, it includes a four-year sunset provision. That means the agricultural community will need to be engaged in maintaining the Williamson Act program into the future, CFBF President Paul Wenger said.

“Maintaining this program is vital to the agricultural community,” Wenger said. “What most people don’t realize is that there is going to be a lot of land transitioning from one generation to the next. When that happens, the land will be reappraised. The values placed on that land at transfer will make the taxes cost-prohibitive. It’s imperative that this land conservation tool be available, because I see more land needing to be enrolled in the Williamson Act, rather than less.”

(Steve Adler is associate editor of Ag Alert. He may be contacted at sadler@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.