Funding for the Williamson Act was almost completely eliminated with Gov. Arnold Schwarzenegger’s signing of the California budget this week. Despite efforts to preserve the majority of the subvention funds in the final version of the budget, Schwarzenegger vetoed all but $1,000 of funding for the Williamson Act, effectively suspending the program.
The budget revisions passed by the Legislature allocated 80% of the funding for the program. But with the failure of the state Assembly to pass the diversion of the local gasoline excise tax to pay down general obligation bond debt and the Tranquillon Ridge oil drilling legislation, the state budget was $156 million out of balance. The governor used his line-item veto to bring the budget back to balance and create at least a $500 million reserve for economic uncertainties and/or natural disasters.
State Williamson Act funds compensate county governments that provide the tax relief for farmers who contract to keep their land in agricultural production for a period of 10 years or longer. Without the state’s $27.7 million reimbursement, or subvention, funds, cash-strapped counties will have difficulties honoring the long-term contracts. At the Wednesday Coffee Talk in Easton, reports the Fresno Farm Bureau, Fresno County Supervisor Phil Larson said the county can’t cancel the contracts, but will likely place existing contracts in a non-renewal status for one year.
According to the California Farm Bureau Federation, if counties choose to exit the program by nonrenewal all of their Williamson Act contracts, landowners’ only option would be to protest the notice of nonrenewal. A written protest filed with counties would result in the maintenance of the Williamson Act property values until there is less than six years on the contract. At that time the property taxes on the farm or ranch land would escalate very quickly to the acquisition value under Proposition 13.