Shot in the heartland

Has Arnold opened the door for urbanization of California farms?

Farmers losing their tax breaks may be more likely to sell their agricultural land to developers.

Farmers losing their tax breaks may be more likely to sell their agricultural land to developers.

SN&R Photo By Larry Dalton

The real Governor Arnold Schwarzenegger is back, and now he’s taking on rural California. Landowners are up in arms over a mostly overlooked provision in last week’s budget revise to terminate a 40-year-old environmental- and agricultural-preservation act, which critics say will negatively affect California’s heartland.

The governor has eliminated state funding for the Williamson Act, which leaves California’s farmland and open spaces vulnerable to urbanization. “In my own county, for example, about 65 percent of the land is protected under the Williamson Act,” Assemblywoman Lois Wolk of Davis said. “So unless we want to see more houses instead of crops, I think it’s really important that we support the Williamson Act.”

The Williamson Act of 1965, which preserves some 17 million of the state’s 29 million acres of free-range land, is now on the chopping block. Under the act, property owners who promise not to develop their land receive tax breaks from counties, which the state later refunds. The state reimbursed nearly $40 million last year and has invested over $700 million since the program’s inception. In 2006, Sacramento, Yolo, Solano, Placer, El Dorado and Amador counties received nearly $9 million from the state in exchange for safeguarding open spaces, environmental habitats and agricultural lands.

“The Williamson Act allows farmers and ranchers to put their land in a contract with the county,” explained Bill Allayaud of Sierra Club California. “They agree to keep it in farming or ranching for at least 20 years, and for that they get a tax cut.”

“The program is important from a food production, food-security standpoint,” said John Gamper, taxation and land-use expert with the California Farm Bureau Federation, “as well as for environmental habitats.”

The governor, however, no longer wants to reimburse the counties. “The state essentially is waffling on its commitment to honor these contracts,” said Casey Stone, a rancher at the Yolo Land & Cattle Co. in Woodland and district director of the Yolo County Farm Bureau.

Budgets for rural counties are stretched thin as is, and if the state kills the refund program and the nearly half-century-old act dies, “It means more pressure on farmers to develop the land,” warned Allayaud. “If [landowners are] paying higher taxes, there’s less incentive to keep their land as ranch land or farmland.”

Enter developers, whose coffers would tempt landowners to sell off their property to urban sprawl.

“It would be the tipping point,” Wolk cautioned.

The Schwarzenegger administration argues that ending state support of the Williamson Act is needed to reduce California’s structural deficit. “Very little room remains for flexibility while remaining fiscally responsible,” Ed Wilson of the Department of Conservation explained.

But Gamper said that Schwarzenegger’s bean counters have it all wrong. “You’re going to wind up paying a heck of a lot more if that Williamson Act ground gets converted to residences,” he argued. According to Gamper, if 1 percent of the 16 million protected acres under the act becomes residential homes, Californians would end up paying $20 million or more annually in taxes to cover homeowner property-tax breaks.

Wolk noted that former Governor Gray Davis, whose deputy chief of staff also was Susan Kennedy, attempted to kill the Williamson Act during his tenure. “It wasn’t a good idea then. It’s a worse idea today,” Wolk said.

“I think a lot of this is political posturing by the administration,” Stone added.

Gamper agreed. “It’s part of the annual logrolling drill of the budget,” he explained, “where you need to get some things on the table that the Republican members want so that you can get the Republican votes necessary to pass the budget.”

But Wolk is optimistic: “I don’t expect this cut to stand. It’s truly penny-wise and pound-foolish.”

“It’s not even penny-wise and pound- foolish,” Gamper said. “It’s just stupid.”