Farmers' tax break victim of economy

Few people living away from the farm have the slightest understanding of the Williamson Act, but it is easy to see that its cost-saving for California farmers is enormous.

The legislation enacted in 1965 allows farm owners a substantial break on their property tax payments. All they have to do is commit to farming for 10 years, or at least keeping the property from being developed for housing or commercial use for that length of time. The contract they make is renewed each year, resulting in a rolling 10-year term, always keeping them 10 years away from development of their land.

The purpose of the act as viewed by its creator, former Kern County Assemblyman John Williamson, is to ensure that vast portions of the state's acreage remain in agricultural production and be taxed as farmland. Farmers often cave under the tax load when their property is assessed at its "highest and best use," something other than farming.

So much for farmers, but what about the counties where their land is located? Revenues suffer from the reduced tax payments, affecting a long list of county-supported services, from road construction and law enforcement to public assistance.

The legislation takes care of that by allowing for county governments to be reimbursed by the state for the lost compensation through payments from the state's general fund. These payments, which reimburse the counties in whole or in part, are called subventions.

But last year, budget cutting by the state whittled the $38 million annual reimbursement to $1,000. The well-publicized fiscal deficit has caused the governor and legislators to effectively drain the subventions fund.

In other words, the Williamson Act is in jeopardy. A few counties have already canceled their agreements with their resident farmers. Others are taking hard looks at their budgets, wondering if they can manage with reduced tax payments from farmers.

Withdrawal from the agreements between farmers and county officials doesn't occur overnight. The 10-year commitment expected of farmers holds. In most cases where con tracts are canceled, the payment schedule continues for 10 years and is reduced one year at a time, allowing all parties to make adjustments over the 10-year phaseout.

The dilemma of canceling the state subvention payments, the very underpinning of the Williamson Act, was examined by the University of California Cooperative Extension's Alvin Sokolow, emeritus specialist in public policy, stationed at UC Davis. He submitted a report in the July-September issue of the university's peer-reviewed quarterly journal California Agriculture.

Sokolow, who has monitored the effect of the Williamson Act since its inception, considers it "a successful case of converging public and private interests, achieving long-term land conservation while helping the bottom line of farmers and ranchers."

At the same time, his article acknowledges that the act has not been the only factor in protecting valuable farmland from urban encroachment, and that it has its critics. Nevertheless, he concludes that the objectives of the act are not only widely supported by agricultural groups, landowners and county governments, but environmentalists and others as well.

Many in agriculture regard the potential loss of the subventions that make the act possible a disaster. As Sokolow's report concludes, time for resolving the issue by preserving the state's participation is running out. Most of the principals are hoping for a more positive resolution than clock-watching.

CONTACT Don Curlee at agwriter1@sbcglobal.net