Where we stand on Williamson Act

STAYING ALIVE

fighting to keep the Williamson act working for you

by Dana Nichol of Reeb Government Relations, LLC

Many California Cattlemen’s Association (CCA) members have been asking about the status of the Williamson Act (Act) and are concerned that this valuable program could be discontinued due to lack of state funding. This article provides information on the goals, history, and status, of the Act. The Act’s main challenge at this time is the lack of state funding to local governments to help defray the tax revenue lost to them as a result of the program. Restoration of this state funding (subvention) is one of the CCA’s top priorities.

WHAT IS THE WILLIAMSON ACT AND WHY DO WE NEED IT?

During the boom following World War II, California’s population boomed. The population in 1940 was about 7 million. By the time the Act was being debated in the early 1960s, the population had risen to about 17 million. Property taxes were rising and making it more difficult for ranchers and farmers to afford to stay in business. In response to this, the state legislature passed the Act in 1965 to curb the loss of agricultural lands to urban use.

The Williamson Act, officially known as the California Land Conservation Act, is a program administered by the California Department of Conservation (DOC). Cities and counties are authorized to enter into contracts with private landowners to restrict specific parcels of land to agricultural and open-space uses. The landowners then receive a reduction in their property tax assessments. The length of these contracts is typically for 10-year terms. There are also 20-year contracts for lands which meet specific requirements relating to their quality, significance or uniqueness, as determined by the DOC. This longer commitment enables the landowner to enjoy greater property tax reductions.

The three main tenets of the Act are protection of agricultural resources, preservation of open land and promotion of efficient urban growth patterns. The Act recognizes that agricultural land is an economic resource which is vital to the general welfare of society and preservation of that land is necessary to protection of the state’s economic resources, especially in providing adequate, healthful and nutritious food for California and the nation.

The preservation of open space land is acknowledged in the Act as having a public value and provides physical, social, esthetic and economic assets to towns and cities. Rural lands can be a key component of properly functioning upland watersheds, which improve water quality, provide endangered species habitat and enhance flood management.

Promotion of efficient urban growth patterns is a concept most people can agree on, however implementing that in practice is increasingly difficult as the population increases and the urban/rural interface contracts. To meet the increased needs of the population, cities and counties struggle to find new revenue sources, often succumbing to the policy known as the “fiscalization of land use.” Open lands are hastily developed into uses which provide quick and easy revenue to the local treasury, usually manifested as shopping malls, auto malls and other forms of sprawl. Haphazard, opportunistic and sprawling urban development can be disastrous to society and is almost impossible to fix after the fact. The Act’s goal states it is a matter of public interest to both rural and urban residents to discourage unsound growth and development patterns. Therefore, the Act is an important planning tool for local government policy makers and planners and provides some long-term stability as a bulwark against short sighted zoning and politically motivated land use decisions. These are

important decisions. This is important, in that if the Act falls into disuse, local governments will have lost a valuable tool with which to implement smart growth planning. The Act’s long-term contracts help prevent local growth plans that would otherwise be implemented according to political expediency rather that sensible public policy.

WHAT ARE SUBVENTION PAYMENTS AND WHY WERE THEY ELIMINATED?

Because the Act provides a property tax relief to landowners who participate in the program, the local governments lose that tax revenue, which leaves a hole in their budget coffers. To reduce the fiscal pain, the state agreed to send funds to them to help backfill the loss. In government budgeting, this backfilling of funds is called a subvention.

From the beginning, supporters of the Act hoped that financial assistance from the state to local governments would be part of the program and would provide an incentive for local governments to participate. This subvention funding was implemented in 1971 via the Open Space Subvention Act (OSSA). The OSSA created a formula for allocating payments to local governments based on acreage enrolled in the program. Between 1971 and 2010, local governments received a partial subvention of forgone property tax revenues from the state via the OSSA.

During the state budget stalemate of 2009, the state was reeling from the effects of the Great Recession caused by the bursting of the housing bubble in 2007. Governor Schwarzenegger was forced to slash hundreds of millions of dollars to the legislature’s version of the budget, which had already made $23 billion in cuts to services and education. The Act’s funding was one of the many programs cut that year and that funding has not been reestablished. When the state stopped sending Act subvention funds to the cities and counties, they lost some of their interest in supporting the program. Some local governments still actively participate in the Act because there is strong, local public support for it and there are still many acres under contracts for this program. However, these governments and their leaders are increasingly being forced to make tough choices in how they are going to fund other public services and programs with less revenue.

Imperial County recently decided to opt out of the Act altogether and Fresno County has discussed the possibility of also dropping out of the program. The OC’s director noted in late 2019 that “the State’s decision to discontinue subvention payments presents a critical challenge to local administration of the program” and “if cities and counties choose to exit the program or even stop accepting new contracts, many farmers and ranchers may go out of business and be forced to sell their lands out of agricultural production.” Currently, 52 counties administer the Act’s programs and some cities administer a local program.

CAN THE SUBVENTION BE RESTORED?

CCA has consistently advocated to have the Act’s funding restored, but these efforts had been complicated by the long-term effects of the Great Recession. At this particular time, the state is flush with cash from federal bailouts and increased tax revenue despite the COVID lock-downs. The state’s wealthy were not adversely affected by the lock-downs. Instead, they saw their revenues soar as people purchased tech devices and products, entertainment, and other stay-at-home services to a greater degree. As a result, California’s tax revenues increased and were sufficient enough to enable the state to set aside $25.2 billion in reserves in the FY 2021-22 budget. The state has been able to stabilize its budget and the federal government has favored California with bailout funds. Earlier this year, California received $42.3 billion in such funds from Washington, D.C. These next few budget cycles may be the time to strike while the iron is hot. Keep in mind that there are a lot of groups looking to get their programs re-funded, so we will have our work cut or for us. Reinstating state subvention payments to counties to help encourage them to maintain this critical program is a CCA priority. The CCA’s 2020-21 Policy Resolutions expressly recognize that restoration of the Act’s subvention funding in the state budget is necessary not only to California’s ranchers, but also to all Californians. The Act was originally adopted not just as a tax relief program for farmers and ranchers, but as a conservation program to protect farmland, open space and wildlife habitat.

CCA also stresses the need to retain local authority over Williamson Act contracts and, minimize landowner contributions. Efforts by the state or counties to unilaterally change the terms of contracts or alter the Williamson Act statutes would be opposed by CCA.

Bottom line: The Williamson Act is in operation, but needs state subvention funding restored to remain viable. The legislature should re-appropriate subvention payments in full to counties.

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LAND CURRENTLY (2017) IN THE WILLIAMSON ACT PROGRAM BY REGION AND ACRES

According to the latest data available from 2017, California’s regions had the following acreage enrolled in the Act’s program:

REGION ACRES

Foothill and Sierra 588,124 South Coast and Desert 692,179 North Coast and Mountain 805,168 Sacramento Valley 1,970,017 Bay Area and Central Coast 3,278,783 San Joaquin Valley 5,418,915

Total 12,711,665

JUSTIFICATIONS THAT SUPPORT FULLY FUNDING THE WILLIAMSON ACT

Cattle ranchers are stewards of the land and an indispensable part of the state’s food supply. Most California ranches are family owned and operated, and many have been in the same family for four or more generations.

Cattle ranchers can help California meet its stated goals of conservation, biodiversity and wildfire resilience on the 38 million acres of working cattle lands in the state because: • California’s ranchers are leaders in innovation and conservation worldwide. Livestock grazing and conservation are not mutually exclusive. • California cannot reach its conservation goals without working with ranchers to conserve rangelands and expand grazing in our state. • The state must recognize the vital role that livestock grazing plays in furthering these goals. • Well-managed cattle grazing is well-known to reduce the likelihood, severity and spread of wildfire, provide habitat for species of conservation concern and reduce the presence of invasive weeds. • Forests could be more efficiently managed in response to wildfires by lowering fuel loads through greater use of managed grazing. Grazing also reduces shrub cover fire hazards in coastal open spaces. • Preserving rangeland also increases water yield. Pavement and concrete reduce the percolative properties of the soil to absorb rainfall and replenish groundwater storage. • Agricultural land’s first use is for the production of food and fiber and other commodities for the health and welfare of the community and the world. • Article 13 of the California Constitution declares the interest of the state in preserving open-space land and provides a constitutional basis for valuing property according to its actual use. Article 13 also allows preferential assessments for recreational, scenic and natural resource areas as well as areas devoted to production of food and fiber. This was put into the Act as a way to build broad consensus for the program.

As CCA members have learned over the last decade, keeping the Williamson Act off life support is a large undertaking to say the least. But as always, CCA staff and officers stay committed to finding a permanent solution to alleviating the tax burden agriculture operators face in California. As any updates are made, CCA will make them available to members.

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