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SECTION II:  POTENTIAL STRATEGIES
GROUP E: STRATEGIES FOR SUCCESSFUL PLANNING BY PROJECT PROPONENTS

Strategy E2: Work with Local Government
Strategy E2.5: Work with others to explore the value of reinstating state funding of Williamson Act subventions

DESCRIPTION:

The Williamson Act has proven to be a popular and successful farmland and open space conservation tool for almost 50 years. 53 of 58 counties participate in the voluntary program that provides property tax relief to landowners in exchange for accepting development restrictions on their land for a term of 10 or 20 years. Subvention payments from the State to the participating counties and cities for the lost property tax revenue have been mainstay of the program until 2009. State budget cuts have dramatically reduced funding for the Williamson Act, which places an increased burden on the participating counties and cities and casts doubt on the future of one of the nation's oldest land conservation programs. 

Recent research, published in the winter 2012 issue of California Agriculture, surveyed 700 ranchers who have Williamson Act contracts and found that 37 percent of ranchers predicted they would sell some or all of their rangeland without property tax reductions provided under the Act. Of those who would sell, 76 percent predicted that the buyers would develop the land for non-agricultural purposes. This suggests that a significant amount of California's agricultural and open space land is in jeopardy of conversion without the property tax reductions provided by the Williamson Act. While land in the primary zone of the Delta is protected from development by the Delta Protection Act of 1992, the Williamson Act undoubtedly increases the economic viability of agricultural operations in the Delta by reducing the property tax burden to farmers and ranchers.  It also limits the price of land because of the contract restrictions, and the effects of changes to ownership on the tax burdens.  The Act allows farmers to purchase land without feeling the full tax burden of a sale from a seller with long-held ownership (which is limited by Proposition 13 rates) to a new owner (whose land will be valued at the new purchase value unless the tax rate is restricted by the Williamson Act). 

In order to offset some of the property taxes lost to cities and counties participating in the Williamson Act, the Open Space Subvention Act (OSSA) was enacted in 1970.  The OSSA reimbursed participating local agencies based on the amount and quality of land under contract (for a time, the amount of payment for prime land under contract was also keyed to whether the land was within three miles of a city).  Until the OSSA funding was cut in 2010-11, the state had paid approximately $1 billion to cities and counties for subventions, and also backfilled property tax support to school districts for losses tied to lower tax rates.  Some counties adopted agricultural preserve programs with additional restrictions or benefits to participants. 

This strategy involves working with the counties, the California Department of Conservation and others to investigate options that could improve the economic base of the counties that participate in the Williamson Act.  Some of the options could include looking at the benefits of restoring OSSA-type incentives and/or to provide incentives to counties to either maintain their current Williamson Act agricultural contracts or to encourage the rescinding of those contracts and the simultaneous signing of new open space/habitat contracts. This strategy could allow farmland to remain privately owned and on the tax rolls while keeping the Williamson Act contracts in place. At the same time it would provide economic relief to counties who have suffered the loss of Williamson Act subventions that have resulted from the recent State budget cuts.

RELATED PROGRAMS AND POLICIES

See discussion above.

ISSUES

The greatest issue is the cost of the subvention program to the state general fund.  Before funding was terminated, the state paid $39 million annually to the cities and counties with Williamson Act programs.  Another issue could arise if limited payments are targeted at the BDCP Planning Area only.  Even if such payments were identified as "in addition" to any increased statewide subvention program, targeted payments could be viewed as counterproductive to efforts to reinstate the subvention program statewide. 

OPPORTUNITIES AND POTENTIAL PARTNERS

The counties have been carrying most of the burden of reduced property tax payments under the Act since 2009. Some of the 53 participating counties have placed moratoriums on new contracts due to the uncertainty surrounding the future of subventions funding; however, at present none of the five Delta counties has placed a moratorium on establishing new Williamson Act contracts.  The California State Association of Counties currently has a policy and promotes efforts to fully fund Williamson Act Subventions funding and could be an effective potential proponent in bringing this strategy to fruition. In addition to local government, a diverse and sizable roster of organizations have demonstrated their support for reviving funding Williamson Act subventions including environmental and agricultural groups, in addition to various coalitions. The California Farm Bureau has been a prominent voice in explaining the value and success of the Williamson Act and has provided continued support and guidance to California counties on changes and status of the Act. The California Rangeland Conservation Coalition is currently in the process of creating a workgroup to develop ideas that could reinvigorate subvention funding. The Working Lands Coalition, a consortium made up of the California Farm Bureau Federation, the American Farmland Trust, the California Rangeland Trust, several agricultural associations, and many more regional land trust groups, has developed a proposal to fund a comprehensive agricultural land and open space protection with greenhouse gas cap and trade auction revenue. The proposal includes the restoration of Williamson Act subventions and links subventions and planning money to incentives for counties and cities to adopt strong open space and agricultural protection programs.

 

If you would like to provide feedback on this strategy, please click the following link: Agricultural Stewardship Strategy Feedback Form

ALS Workgroup: ALS Framework and Strategies: Section II:  Strategy E2.5 Williamson Act Subventions: 102913