State may cut rural funding
The high costs of fuel, a hay crop one-third of normal and water bills “like the national debt” make ranching a struggle financially for fifth-generation rancher Susan Hoek.
But after her family has raised cattle in Penn Valley for 128 years, Hoek and other farmers and ranchers in Nevada County are bracing for a punch from the state that could strip away the cushion that has helped keep agriculture economically viable.
In a May revision to the state budget, Gov. Arnold Schwarzenegger proposed eliminating $40 million of funding for the Williamson Act. The law, officially known as the California Land Conservation Act, has been providing property tax breaks of up to 70 percent to farmers since 1965. It creates an arrangement with counties to voluntarily restrict land to agriculture and open-space use.
As growers and ranchers face foreign competition and ever-higher costs to produce, the subsidy has kept many agricultural lands productive and out of the hands of developers.
But if funding from the state is lost, rural counties, such as Nevada County, will have to make up the difference or begin charging farmers and ranchers like Hoek and her 77-year-old father, Neil Robinson, property tax at full market value.
Hoek has rosy cheeks and strong, tan arms to show for her years of hard work. “It’s a tough life” that she wouldn’t trade for all the money in the world, she said, standing in the warm morning sun with 575 acres of rolling, oak-studded pastures spread out behind her.
Yet it’s hard to know what could be the long-term effects of losing what is essentially a state subsidy.
“Most of them are bigger ranches that have been in the county for many, many years (and they) need the break the Williamson Act gives them,” said Darlene Moberg, secretary-manager of the Nevada County Farm Bureau.
Safe for now
Nearly 16.9 million of the state’s 29 million acres of farm and ranch land are protected under the Williamson Act, according to the State Department of Conservation.
There are somewhere between 17 and 20 farms and ranches with Williamson Act contracts in Nevada County, according to the county assessor and planning department – about 3,700 acres of working agricultural land.
The state reimbursed the county $18,000 in lost tax revenue for the 2006-2007 season. That’s chump change compared to the $34 million in property taxes collected this year.
The economic impact would be a hit to county coffers but wouldn’t break the budget this year because the number of farmers in the county who benefit from the act are relatively few.
“It is a manageable budget issue,” said county finance director Joe Christoffel.
In comparison, Butte County received nearly $650,000 in subventions from the state, according to a letter from the office of Assemblyman Rick Keene dated May 18.
Risks to small farms
Hoek’s Robinson Ranch has held a Williamson Act contract since the 1960s, Hoek said. She relies on the money in saved taxes to make improvements to the working ranch of 225 cows and calves.
Hoek says her family could probably manage to stay afloat without the tax break, and she has no plans to retire her family’s land for development.
But it may be the breaking point for younger farmers just starting out and older farmers who are considering retirement.
“There are some smaller operations that may have to back away because of impacts to their bottom line,” said Terry Jochim, president of the California Beef Cattle Improvement Association. Even counties with smaller concentrations of agricultural land, like Nevada County, will experience consequences if the Williamson Act discontinues because of the gateway it would open to development.
“It’s another whack at the agricultural group that already is being attacked by all sides,” said District 4 county Supervisor Hank Weston.
To contact Staff Writer Laura Brown, e-mail firstname.lastname@example.org or call 477-4231.
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Governor Should Keep Promise Made To Rural Counties And Family Farms
By Assemblyman Rick Keene
In his May Revision of the Budget, Governor Schwarzenegger recently proposed eliminating an important source of funding promised to many rural counties throughout the state. That funding, totaling nearly $40 million, is provided to counties by the state under what is commonly known as the Williamson Act. Officially, the law is known as the California Land Conservation Act of 1965, authored by Assemblyman John Williamson of Kern County. It was designed to protect family farms and ranches during a period of rapid urban development and skyrocketing property taxes by providing subventions to counties for agricultural land that is assessed a reduced property tax rate. To that end, it is still very useful and widely popular among counties and landowners who participate in the program. A survey was conducted 24 years after the implementation of the law, in which one in three Williamson Act farmers and ranchers reported that without the law they would no longer own their parcel.
There is an estimated 16.5 million acres of farm and ranch land enrolled in the program, including 6 million acres of prime farmland (meaning the land is free from physical limitations to its agricultural use). Or in other words, the enrolled land includes: more than one-third of all privately held land in the state, half of all agricultural land, and more than two-thirds of all prime farmland in California. Without the much-needed subventions from the state, many counties would be forced to re-assess property taxes on agricultural land at full market value. The Williamson Act saves enrolled landowners anywhere from 20 to 75 percent in property tax per year, if forced to pay full price, many family farms and ranches would be surely have to sell their land, thus considerably damaging our agricultural economy.
In many cases, counties would not even be able to collect the increased property taxes for at least four years. A provision of the law states that if counties or cities do not renew a Williamson contract and the landowner protests, the local entity may not begin to raise property tax assessments for at least four years. In fact, it can take between nine and nineteen years to collect the full property tax assessment. If counties were forced to begin the non-renewal process on all Williamson Act land, they could lose up to $40 million annually for nine years; a total of $360 million.
And as subvention payments are some of the most flexible discretionary monies that counties and cities receive, their already inflexible budgets via state mandates would be made even worse. While the some may try to downplay the importance of these subventions, they are an important source of funds to many rural counties. In 2005, Plumas County received over $100,000 in subvention payments, Lassen County received over $430,000, and Butte County received nearly $650,000, and other north state counties like Colusa, Tehama, and Glenn Counties received up to $1 million, no small sum by any measure.
When the Williamson Act was signed into law, it signaled an agreement between private landowners, counties, and the state. By cutting this funding, the State is going back on the promise the state made to these landowners and counties. The essentially amounts to a breach of contract and could arguably constitute an illegal unfunded mandate. Williamson Act land offers a variety of environmental benefits, including flood protection, groundwater recharge, and wildlife habitat offsets.
With over $1.9 billion in proposed deficit spending, the State certainly needs to make cuts in the budget; however, eliminating its obligation to provide $40 million of critical money to rural counties is hardly the solution. The government has a legal and moral obligation to keep the promise California made to family farms over 40 years ago by providing these vital funds.
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