While it has led to an outcry from rural counties and agricultural circles, in the scheme of things $28 million is relatively little money both from the standpoint of balancing the budget and a standpoint of popular outcry.
The loss of over a million comes on top of all the other budget crunches and cuts.
Senator Lois Wolk:
“This measure really is critical to agriculture in California. Keeping land in agricultural use has been very difficult and very costly for us.”
The Senator told NPR:
“This is not the first time the governor has tried to cut the Williamson Act. He’s tried to do it two other times since I’ve been in the legislature and we’ve been able to fight back. However, this year given the budget, we weren’t able to be successful. I think it’s important to try to reform the Williamson act…to strengthen it…”
What is the impact of this loss? That depends on who you ask. Some argue that the end of the contracts will push property taxes higher and drive smaller growers off the land.
Others however, argue that while it will hurt farmland preservation in California, it is not as serious as some contend. They argue that the land in Williamson contracts is too far away from existing development to be endanger and that local governments have other tools they can use to fight development.
But others have countered that the rising taxes will force smaller growers and sink those farms who are already working with thin profit margins.
Robert Ramming, a Yolo County resident with land between Woodland and Davis, is one of those especially vulnerable. He told both the Sacramento Bee and Davis Enterprise that if the property taxes go up, people like him will not be able to survive.
Mr. Ramming told NPR last week:
“On the land portion of our property taxes we’re paying about a thousand dollars a year. If we didn’t have the tax protection, then I guess oh, we’d be at triple that. Possibly six times that. And, we’re a shoestring operation so it would eat up about 30 to 40-percent of our profits…”
The Sacramento Bee reported that most of the rural counties preferred not to cancel these contracts however, but they may not have the money to keep the program going. You are talking about small rural counties like Glenn County, Colusa, Tehama and other possibly losing near $1 million.
According to the California State Association of Counties (CSAC):
“The Williamson Act is our most cost effective incentive-based farm and ranch land conservation tool.”
CSAC spokeswoman Sarah Jimenez said:
“Counties still have to honor Williamson Act contracts. Counties just will not receive the backfill the state has provided them for the agreements with property owners.”
In Yolo County there has been a strong will to preserve agricultural land and maintain the rural character of the county. There seems to be the will in place at least so far to maintain the Williamson Act and the contracts.
However, the county has already cut $24 million from its budget and is now facing an additional $11.4 million in cuts which will push the total cuts to half of the general fund budget.
The state took about $3.3 million from the county in the form of Prop 1A money and on top of that over one million in cuts to the Williamson Act.
It was just in May that Senator Wolk was working to pass measures to strengthen the Williamson act and its protection of open space and agricultural land with Assemblymember Mariko Yamada as the principle Assembly coauthor.
Senate Bill 715 sought to reform the Williamson Act addressing concerns from critics who claim that the program is being abused by landowners who enter into preservation contracts with intentions of using the land for non-agricultural purposes such as development. The measure would have increased local enforcement authority over contract compliance requiring proof of agricultural income for land under contract.
Said Senator Wolk at that time:
“It is critical that we take steps to ensure long-term conservation of California’s valuable agricultural and open-space land, providing strong and consistent state and local enforcement to protect the significant investment the people of this state have made in this program. We need to make sure the Williamson Act lives up to its intended purposes.”
County Supervisor Jim Provenza testified on the bill:
“This measure really is critical to agriculture in California. Keeping land in agricultural use has been very difficult and very costly for us, and the money that we receive from subventions is just essential. But we recognize that there is a need to tighten up the Williamson Act and protect it, not just the subventions, but its constitutionality. That’s what this bill is designed to do. Looking into the future, this bill will enable Yolo County and other agricultural counties throughout the state to keep land in agricultural use. Given the amount of land that is going out of farming in this state on a daily basis, this measure is sorely needed.”
COMMENTARY
While Counties such as Yolo will struggle and keep agricultural land protections in place, there is little doubt that ag land and open space will come under increasing fiscal pressure should this crisis in California continue. Yolo County has fought long and hard to resist urban development and the sprawl that we have seen in recent years throughout the I-80 Corridor. That fight has become more difficult and places a greater need for the leaders in the county to work for ways to help our agricultural industry survive.
This is a big concern for Davis which just two years ago had to fight a possible move by the county to develop specific properties on its borders. The loss of revenue from the Williamson Act of course is small compared to the overall economic downturn in this county, which as mentioned earlier has cost the county around one-half of its general fund budget. The city of Davis has helped to prevent additional county generated growth on its boundaries through the pass-through agreement which passes through a portion of money from the redevelopment (which has also been raided by the state) to the county in exchange for control over land use decisions in the city’s growth area. Will the suspension of the Williamson Act put this in jeopardy? Right now, the answer is probably no, given the make up of the current board of the Supervisors with three pretty solid votes against county imposed growth on Davis. But in the coming years that could change.
It has been demonstrated a number of times that in the long term residential growth does not bring in revenue. But since it possible brings in huge profits for the developers, deals could be cut between the county and developers that might make fiscal sense if the county cannot fiscally recover from this downturn. Again, the Williamson Act is only a very small portion of this puzzle, but it is yet another loss of revenue for the county and in the long term there is no telling how that will play itself out.
The bottom line is that there is a sense of complacency amongst Davis residents following the resounding defeat of the efforts by the county to even study the possibility of development on the Davis city edge. There seems a belief that the pass-through agreement will protect Davis. This belief probably flies in the face of what will be extreme growth pressures in the coming decade. Residents of Davis who wish to limit growth on the periphery ought to at least be aware of the forces that are going to come to bear on the county to develop more agricultural land and we as a community need to look toward ways to increase and improve upon the business and economic aspect of our rural and agricultural heritage.
—David M. Greenwald reporting
I am a farmer between Davis and Woodland, and my family would like to continue farming for years to come.
However, the single most important natural resource in CA today is water, and not all of us that are farming today are going to have enough water to continue farming, regardless of Williamson Act issues(unless of course, tax payers and environmentalists can agree and fund solutions for storing and moving water around our state). Irrigated agriculture is a much bigger water user on a per acre basis than residential. Perhaps some of those marginal ag producers shouldn’t be in business if they can’t pay their fair share of taxes and keep producing. Perhaps some of this land should really be residential instead of agricultural.
While you and some others that read this blog may have come to the conclusion that residential development does not bring in money for the long term, that belief isn’t held by everyone or all cities. Further, it is certainly not true in the short term, and local cities and governments almost certainly have some short term financial needs that could be met by developing some lands.
I am a farmer between Davis and Woodland, and my family would like to continue farming for years to come.
However, the single most important natural resource in CA today is water, and not all of us that are farming today are going to have enough water to continue farming, regardless of Williamson Act issues(unless of course, tax payers and environmentalists can agree and fund solutions for storing and moving water around our state). Irrigated agriculture is a much bigger water user on a per acre basis than residential. Perhaps some of those marginal ag producers shouldn’t be in business if they can’t pay their fair share of taxes and keep producing. Perhaps some of this land should really be residential instead of agricultural.
While you and some others that read this blog may have come to the conclusion that residential development does not bring in money for the long term, that belief isn’t held by everyone or all cities. Further, it is certainly not true in the short term, and local cities and governments almost certainly have some short term financial needs that could be met by developing some lands.
The Williamson Act allows a ranching family to get a public subsidy while they wait for development to move closer to them so they can then develop at a better profit. It reduces their holding costs in the interim. It is important to recall that there are other options, for example if a “family farm” plans to save the land for future generations and has no plans for development, they can easily sell-off the rights to development to a number of entities such as the Nature Conservancy. They get money up-front, reduce their property tax valuation and preserve their farm for the future. No, the contracts are only 10-years at a time for a reason, that gives the ranchers a chance to review the market each time to see if it is time for the final “harvest” and sell their land to developers.
Lets not cry too hard for the loss of funding for this program.
Hello, we have a budget crisis, and money has to be cut from somewhere. Having read DPD’s article, and the above two comments, I am not convinced more funding is needed to reinstitute funding for the Williamson Act. Perhaps we need to rethink this one.
Anon: What is your priority?
“The state for some reason”
You mean you don’t know?
I have long supported the Williamson act and thought that the Gov was being short sighted by trying to defund it. Now I am having second thoughts because of the no new taxes attitude of the Republicans in this state. The areas represented by Democrats by and large don’t have as much land under Williamson act protection. Yolo is probably an exception. LA and the Bay Area, where the large blocks of Democratic support have little land protected this way. So it really is a chickens coming home to roost kind of tax increase. The Republicans in the central valley for the most part haven’t supported tax increases so why should they continue to get tax breaks. They should pay their fair share one way or another.
I’m willing to be convinced I’m wrong about this, but I think the argument that the Williamson Act ever prevented farmland from being urbanized is mostly bogus.*
There are two unrelated factors which keep farmland agricultural: 1) most of it is quite remote and there simply is no economic reason to urbanize it. The gains to be had from farming are simply greater for that land than the gains from building unwanted urban uses out in the middle of nowhere; and 2) zoning laws. Almost without exception, California’s farmland is zoned for ag uses, and cannot be urbanized without the approval of an elected body, usually a board of supervisors. As such, unless the supes want ag land to become housing or strip malls, it by law will remain as agriculture.
For those reasons, I don’t see there being a true public benefit from the Williamson Act. However, there certainly have been two private beneficiaries: 1) legacy farming families; and 2) real estate investors.
Perhaps for nostalgic reasons, we collectively want families which inherited property to continue farming that land. Without the Williamson Act, many of these heirs whose profit margins are thin would have to sell their land to better capitalized farmers, as their property values grew. (This is sort of parallel to why we have Prop 13.)
Although it was not the intention of Williamson, its 10-year contracts have also served real estate investors. People who hope to make a long-term profit off of farmland can buy farms near cities, lease them out to farmers, and pay very little in property tax for a decade, while urban sprawl moves near them, making their land more valuable. When their Williamson contracts expire, they can develop the land (if allowed by new zoning) or sell it profitably to new investors.
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*Of course, it is not totally bogus. I could imagine a farm which is profitable under Williamson, but not profitable without it. If that farm loses its Williamson Act subsidy and the operation goes bankrupt, the county in which it sits might rezone it simply to prevent blight. However, that presupposes that there is a more economical use for the land, something not true with the vast majority of rural properties.
Zoning Laws! You really don’t know what you are talking about. The economics of development is that the value added by development beats ag everytime as long as there is real demand for the development. The Williamson Act was designed to create an incentive for farmers whose land values were rising and their property taxes skyroceting from being taxed out of ownership. Remember, this law predates prop 13 by 13 years. A better argument is that post prop 13 your property taxes can’t go up more than 2% a year even if you are prime development land so the tax pressure is off. Think of the farm next to Disneyland where the owners were able to resist selling to Disney for a generation as an example. Of course we now have 44 years of tax breaks and as such the tax breaks have caused the price of real estate protected under the Williamson act to go up just as the undertaxation of real estate under prop 13 has caused prices to go up. Since taxes are a marginal cost of owning property the lower your taxes the marginal value represented by those tax breaks is shifted to the principal value in fee of the property. This of course is one of the many reasons things created the real estate bubble in California. So prop 13 causes the Willaimson Act to be moot for ownerships that have not changed hands for a long time. However for properties that have changed hands since the Williamson Act and prop 13 were passed or properties that are marginal economic operations, getting rid of the Williamson Act could be the final nail in the coffin.