Legislators Consider Merits of Williamson Act

Mar. 3, 2010


For more than 45 years, California farmers, ranchers and land owners have voluntarily participated in the Williamson Act, which restricted the use of their land to agriculture but gave property tax breaks for the trade off.

Farmers, ranchers, local governments, conservation groups and landowners met today with the Senate’s Local Government Oversight Committee to discuss the future of the Williamson Act, and demonstrated that politics makes strange bedfellows. Most of those present agreed that the Williamson Act was worth saving, but for very different reasons.

The Legislature passed the Williamson Act in 1965 to “promote the conservation, preservation and continued existence of open space lands,” albeit with restricted use in order to save agriculture land in California “for recreation, the environment or conservation of natural resources.”

At stake is $38 million of state funding to local governments; funding local officials say they need to have, not only to continue property tax breaks to landowners but to even survive. Governor Arnold Schwarzenegger wanted to end the state subvention payments in the 2003-04 budget, but the Legislative Analyst’s Office (LAO) recommended a phase-out over 10 years as an alternative.

Peter Detwiler, Local Government Committee Consultant, said there were 16.6 million acres registered under the Williamson Act in 2007.  Local governments claimed $38 million in General Fund subventions, of which 60 percent went to San Joaquin Valley counties.

The subvention payments go to counties, a few cities and indirectly to school districts to replace lost property tax revenues. The largest amount received by any municipality was Fresno’s $5.2 million. 

According to Detwiler, the LAO has “been skeptical” of the Williamson Act’s benefits, and recommended cuts in the 2008-09 budget, to $27.8 million. Instead, Schwarzenegger slashed the annual appropriation to $1,000, Detwiler said.

Testifying on behalf of the need for continuing county support of the Williamson Act were officials from Fresno, Kern, San Benito and Lassen counties, each of whom said the money received from the state to support Williamson Act property owners is crucial to their budgets.

Property tax benefits to land owners are “significant enough to allow farmers to stay in business without the incentive to sell land for development,” said Fresno County Supervisor Judy Pace. She added that in 2007, farmers and ranchers in Fresno County suffered a 42 percent net operating loss. As a result, “Eight long-term packing houses closed, costing 100,000 to 500,000 jobs.”

San Benito County Administrator Susan Thompson explained that the loss of Williamson Act funds last year forced her county to make steep cuts in public safety and county employees. “It’s good policy,” she said. “It produced the intended effects.”

But Kern County Planning Director Ted James had a different take. James said the Williamson Act makes it easier for him to do his job as it helps discourage farmers from selling land for development when times are tough. “The program helps keep farmers in business,” James said.

The Sierra Club testified that the Williamson Act is an ongoing environmental and conservation success. Michael Endicott, a resource sustainability advocate with the organization, said it’s much easier to promote conservation when landowners are interested in sustainability. As for ongoing money sources for the Act, Endicott suggested oil severance and property transfer taxes as possibilities to help the state pay for the fund and continue support for open space lands.

Paul Wenger, President of the California Farm Bureau expressed concern about estate taxes and appraised property values for farmers and ranchers. Wenger explained that properties appraised high and then taxed at higher values instead of the real market value destroy family farms and ranches.

Several of those testifying said the cost of $38 million to the state was a “bargain,” as the benefits far outweighed the cost. Given that the property owners are farmers and ranchers, the tax relief is a uniquely productive benefit, as they are food producers, unlike so many other recipients of tax breaks or subsidies.

Committee Chairman Dave Cox, R-Fair Oaks, suggested that the Legislature could update the Williamson Act to address the differences between “growing land” and “grazing land,” as ranchers need more land than growers.

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  1. EastBayLarry
    EastBayLarry 4 March, 2010, 14:48

    However this works out will be a loss. Either revenue for the state or forcing farmers and ranchers out of business.

    Perhaps we should just concentrate on repairing the economy so these tax revenues will not be so desperately needed.

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  2. Daniel Sinton
    Daniel Sinton 13 September, 2010, 10:02

    This is a really great article by Ms. Grimes – thank you for writing it and bringing an important subject to light.

    I’d like to add that a study in the 1970’s demonstrated that keeping Agricultural land saves counties and the state money, mainly due to the reduction in costs of services.

    If the Williamson Act disappears, many farmers and ranchers across the State of California will be forced to sell their land, because revenues for many of these places no longer exceed expenses. Many 21st century ranchers and farmers have a primary goal of keeping their land as open space and subsequently protecting the environment, and a secondary goal of making a living off of the land. An increase in taxes (which will come with the loss of the Williamson Act) will almost surely mean the loss of tens of thousands of acres of open space and agriculturally vital land. A secondary effect of losing the Williamson Act could be a substantial increase in grocery costs – costs for fruits, vegetables, and meat could all rise dramatically to offset the cost of increased taxes.

    Given that the State of California is the nation’s most important agricultural asset, it only seems right that this be one of the budget’s biggest priorities, especially considering it is such a minute sum compared to the overwhelming benefits it provides.

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