Davis proposes eliminating farmland preservation act funding

The Mercury News


GALT, Calif. (AP) - As California struggles to accommodate a booming population, the state's 38-year-old program to preserve farm and range land could fall victim to its budget woes.

Searching for ways to erase a deficit that could reach $34.6 billion, Gov. Gray Davis has proposed eliminating the approximately $40 million a year the state spends to reimburse counties and cities that sign so-called Williamson Act contracts.

The contracts provide lower property taxes for farmers, ranchers and other property owners who agree to keep their land in agriculture or open space for at least 10 years.

Critics say loss of the money would force most local governments to drop out of the program and make it tougher for many growers to stay in business.

``It's going to make it a lot tougher,'' says Leo VanWarmerdam, a Sacramento area dairy farmer who says a Williamson Act contract can mean a savings of 30 percent to 35 percent on property taxes.

``During these tough times in agriculture and dairying, pretty much every dollar counts,'' he said. ``Every dollar that's taken away from us by rules and regulations is just undermining the business.''

Under the act, named after John Williamson, a former legislator who died in 1998, property tax assessments are based the land's income potential as agricultural property instead of its value if sold for residential or commercial use.

The contracts are automatically renewed every year for another 10 years unless the grower or the local government files a cancelation notice. If that happens, the contract is phased out over the next nine years.

Twenty-two of the 54 counties involved in the program offer bigger property tax savings for landowners who sign 20-year deals.

More than half of the state's agricultural land -- 16.3 million acres -- is covered by the contracts.

``This has been a program that has been around for nearly 40 years; it's absolutely tried and true,'' said Assemblywoman Lois Wolk, a Davis Democrat who is leading legislative opposition to the governor' proposal.

``It's not the entire answer in the preservation of prime ag land and open space, but in a growing state it seems to me we need to do everything possible to preserve the open space and farmland we have.''

California's population, now about 35 million, is projected to reach nearly 59 million by 2040, and some of the biggest growth rates are expected in the state's farm belts.

Anita Gore, a spokeswoman for Davis' Department of Finance, says the governor supports the Williamson Act but had to make some tough choices in recommending ways to eliminate the deficit.

``With a $34.6 billion shortfall, all possible general fund savings options had to be considered,'' she said. ``It's not that he doesn't support the Williamson Act. It's not as if he doesn't support open space and smart growth. It's a matter of there's not enough money.''

The funding might be restored in future years, and counties and cities could still carry on the program on their own without the state support, she said.

But Wolk and John Gamper, director of taxation and land use for the California Farm Bureau Federation, say most of the counties that participate in the program would be forced to phase it out if the state discontinued the reimbursements.

``We're talking about counties that are under tremendous strain,'' said Wolk. ``They will be asked to make choices at the local level between health care for children and preservation of ag land. We ought to be assisting them in both areas.''

There are also seven cities -- Camarillo, Hayward, Menlo Park, Newark, Palo Alto, Perris and Redlands -- that receive Williamson Act payments for a total of 5,675 acres.

The Legislature's budget analyst, who has been critical of the Williamson Act, is recommending that lawmakers gradually reduce the state's support, say by 10 percent a year, to ease the impact on local governments.

Mark Ibele, an expert on state and local tax issues for the analyst's office, says the analyst considers the act an inefficient way to preserve agricultural land and open space because most of the property covered by the act isn't in immediate danger of being developed.

``If there is a desire to have open space it could be done in a much more open, direct fashion than using the tax code,'' he said. ``In any program like this you are going to get some cases where it does make a difference, but there's typically a lot of unnecessary expenses.''

Gamper says the analyst's conclusions are outdated, that elimination of the act would release a ``pent-up demand'' for rural homes.

``If it wasn't for the Williamson Act, we would see the parcelization of our watershed areas and our range land resources that provide significant wildlife habitat and scenic beauty,'' he said.


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