During last year’s debate over Placer Legacy, a proposed county program that would help preserve open space and agricultural lands I perpetuity, I remember several opponents confidently standing up and saying in public forums that the Legacy program wasn’t needed because of the Williamson Act. Most people in the audience shook their heads and naturally asked themselves, “What the heck is the Williamson Act?”

The Williamson Act, named after John Williamson, the state legislator who created the program in 1965, allows a county and a farmer to enter into a contract, for up to 10 years at one tie, in which the county agrees to reduce the property taxes on the property if the farmer continues to use the land for agricultural purposes. The idea is to keep working lands in farming rather than converting them into rows of houses or shopping malls. Currently, approximately 16 million acres, or about half of all farmland in the state, is enrolled in the Williamson Act program. Since 1971, the state has partially reimbursed counties for the lost property tax revenue. This year, the state is expected, unless the law is changed, to reimburse the counties $39 million for Williamson Act enrollments.

But some of the organized, non-farm opponents to Placer Legacy, who argued that we didn’t need the proposed program because of the Williamson Act, naively showed that they didn’t know much about how state government really works in terms of the long-standing unreliability of “promises” made by the Governor and State Legislature. If you rely on such “promises” by politicians, especially when the going gets tough, you’ll end up waiting at the altar with a tear-soaked handkerchief and a wilting bouquet of flowers.

In the case of state payments to counties for Williamson Act enrollments, it looks like the state is getting ready to play “the Cad” rather than “Mr. Right.” I was dismayed, but not totally surprised, when I learned that Governor Davis, in his revised Budget, proposed to eliminate the expected $39 million in state payments to counties for the Williamson Act enrollments. The lack of state funding for this program cold lead rural counties, over the net several years, to end most, if not all, of their long-term contract with farmers.

Even with the Williamson Act, it has been a struggle to keep agricultural lands in production when these lands are located near encroaching retail shopping centers and housing subdivisions. According to a Placer County report, “the Williamson Act has been effective at maintaining both open space and productive agricultural lands in western Placer County” but that “recent trends have resulted in more land coming into the program.”

If Governor Davis’ proposal is adopted by the Legislature in the next few weeks, counties will, in the quest to grab hold of additional sales tax revenue, have even stronger incentives than they do now to rezone and convert these farms into parking lots, retail stores, and subdivisions with names like “Quail Ridge” and “Vineyard Place” where there are no longer any quail or vineyards left. The decision to convert farmland to retail development or housing is difficult, if not impossible to reverse. Bob Krauter, with the California Farm Bureau, said, “once farmland goes out of production for some other use, it doesn’t go back into agriculture.”

The Governor’s proposal to eliminate Williamson Act funding is symptomatic of the larger failure of state leadership in properly realigning tax incentives at the state and local level to help produce good public policy. Right now, the state government, with a budget that is overly reliant on revenues generated by wildly fluctuating capital gains taxes, goes through these cycles of spending orgies during the flush times and cutbacks in spending, borrowing, and tax increases during recessions. Meanwhile, since the state continues to annually swipe billions of dollars in property tax revenues from cities, counties and special districts, these local governments eagerly look for ways to attract retail development while neglecting the need to attract businesses that provide high-paying jobs. Ten years ago, some policy wonk called this problem the ‘fiscalization of land use.” The problem is still with us and its leading to decisions that in the long run, if we don’t make policy changes now, will cause severe deterioration in the quality of life and family atmosphere of towns across California.

We, as residents who care about preserving our precious quality of life, need leadership in the State Capitol to act now to implement comprehensive tax reform that will provide a more stable and predictable funding stream for important state programs and, at the same time, provide the right incentives for local governments to make wise land use decisions that are in the best interest of all. This can be done. It is not an impossible task. And the state government needs to recognize the full value and benefits of agricultural lands that accrue to all residents and assist in preserving farmlands. If the state fails in its duty, the kids may be singing a new tune:

“Old McDonald had a farm,

Ei-I-Ei-I-O

And on this farm he had a big big tax,

Ei-I-Ei-I-O

With a tax tax her

And a tax tax there,

Here a tax, there a tax,

Everywhere a tax tax,

Old McDonald sold his farm

Ei-I-Ei-I-OOOO”

 

June 13, 2002

Postscript: The FY 02-03 Budget restored state Williamson Act payments to counties.