Williamson Act takes hit in state cuts

By COLBY FRAZIER — July 30, 2009

When Gov. Arnold Schwarzenegger wielded the budget-balancing pen on Tuesday, signing off on a $27 billion budget package, he tacked on an additional $489 million in extra cuts that essentially put the Williamson Act program on life support.

Established in the 1960s, the Williamson Act provides tax breaks to landowners who enter agricultural property into 10-year rolling contracts that restrict most development.

In Santa Barbara County about 550,000 acres are under Williamson Act contract, or roughly 75 percent of all local agricultural land.

In the cyclical agricultural industry, many landowners rely on the tax break to remain viable, while agricultural and open space advocates appreciate the contracts and the resulting blockade on most types of development.

Schwarzenegger stopped short of dismantling the program, opting instead to pull $27.8 million the state would have paid to counties this year to help offset the decreased property taxes paid by Williamson Act landowners.

According to county Supervisor Doreen Farr, whose 3rd district includes the Williamson Act-rich Santa Ynez Valley and Gaviota Coast, the county would have received $640,000.

But the damage to the county, for now, is minimal, she said, largely because county budget makers anticipated the state’s move and drafted this year’s operating budget without these funds.

“We didn’t plan to get it and indeed we’re not going to get it,” she said. “The bottom line is even though the money has been cut, the good news is the program is not eliminated.”

Farr said property owners with land under Williamson Act contracts won’t notice a change, since their property taxes should remain the same.

One of the things the state is not permitting the county to do, Farr said, is reassess the value of land under the contracts in order to squeeze more property taxes.

The $640,000 the county would have received was to be placed into the general fund, she said.

Anticipating the state’s move, the county simply didn’t count on receiving this money, and, perhaps more importantly, didn’t spend it.

The result, Farr said, is that this sum won’t have to be cut from the county’s $781 million operating budget when the Board of Supervisors begins grappling with how to cut tens of millions from local programs that were suffocated at the state level.

Farr said the Board is expected to discuss the cuts, at least preliminarily, when it returns from a summer recess on Aug. 18.

While the state didn’t ax the Williamson Act completely, it did come dangerously close (Schwarzenegger allocated $1,000 to the program, the minimum needed to keep it alive).

Farr, who is confident the state will resume subsidizing the program when its economic situation improves, said if the Williamson Act program were killed, it would be a “disaster.”

Along with giving landowners a break on costly property taxes, the Williamson Act often stifles lucrative development plans. It does this by requiring landowners to sign a 10-year contract that automatically renews each year unless a property owner files a non-renewal request. This essentially ensures that vast swathes of pristine agricultural land consistently remain about a decade away from being free of the contract, which prevents any immediate efforts to alter zoning and pave the way for development.

“It [is] extremely important for California’s agriculture industry to keep this program in place …” Farr said.

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Williams act : 7/30/2009

Under the Williams Act qualifying agriculture properties enjoy lower property taxes. Because the county receives funds from the state to offset the lower tax revenue there has been little local oversight for compliance. Michael Jackson's Neverland was under the Williams Act for many years. The only time anyone noticed Neverland was not in compliance was during the property search for the child molestation case. Like Neverland there are many properties that grow fruit trees or allow cattle to room with no plan to make a business out of it, only to get a tax break. The Williams act should be completely overhauled and tax breaks should be associated with agriculture business revenue. profits and losses from tax returns.

Fed-up tax payer

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