Gov. Arnold Schwarzenegger has recommended the elimination of Williamson Act funds, which total $39.1 million, from the state's fiscal year 2007-2008 budget. If the funds are canceled, counties that take part in the program will have one of two options: either fund the program through the county budget or cancel it entirely, said Bill Gillette, Santa Barbara County Agriculture Commissioner.
The Williamson Act was enacted in 1965 as a way to preserve agriculture and open space by discouraging the conversion of farms for urban uses. Under the act, local governments enter into contracts with private landowners that restrict specific land parcels to agricultural or open-space uses for a minimum of 10 years from the day the contract is signed.
If counties decide not to continue the program, Gillette explained, they would still be under contract with landowners for the remainder of their 10 years.
According to the state Department of Conservation, 16.9 million acres of California's 29 million acres of farm and ranch land are currently protected under the Williamson Act, which helps farmers by saving landowners about 20 to 75 percent of property-tax liability each year. About one third of all of the land in Santa Barbara County and just more than one third of all land in San Luis Obispo County are protected under the Williamson Act.
"This is a program that is successful, doesn't cost the taxpayers much money, and it helps the farmers," said Sam Frye, a local farmer and member of the board of directors of the Santa Barbara County Farm Bureau.
The $39.1 million that Schwarzenegger wants to eliminate from the state budget is the entire amount distributed through the Williamson Act each year, said H.D. Palmer, deputy director of the state Department of Finance. The money comes from the state's general fund and is paid out to each county at a rate of $5 an acre for prime agricultural land and $1 an acre for non-prime land. As of 2005, every county in the state except Del Norte, Los Angeles, San Francisco, Inyo, and Yuba offered Williamson Act contracts.
Palmer said that Santa Barbara County receives just less than $700,000 a year and San Luis Obispo County takes in about $1.1 million. San Luis Obispo County is unusual, he added, in the fact that only one out of five counties in the state receive more than $1 million a year through the act.
The state funds were originally designed to replace money the county wasn't receiving in property taxes, Gillette said. That was 1965. Today, with the increase in property values, the funds are much less than the approximately $10 million that Gillette estimated Santa Barbara County stands to receive in property taxes if the act is eliminated.
"The county knows this and the county supports the program," Gillette said.
Farmers, who are running on a tight profit margin already, could be forced to go out of business if they have to pay high property taxes, Frye said.
"If the Williamson Act were eliminated, it would have a very big impact on farmers," added Brenda Ouwerkerk, assistant agricultural commissioner for San Luis Obispo County.
The idea of eliminating the Williamson Act isn't a new one, said both Ouwerkerk and Frye. Rumors that the act may be cancelled have surfaced in previous years, Frye said, but he can't remember a time that such a move was actually recommended by the governor's office.
"The idea has been floated around whenever the budget gets tight," Ouwerkerk said.
Palmer said that Schwarzenegger has always supported agriculture, but that eliminating the Williamson Act is one of the revisions the governor has proposed to curb state spending.
"Property tax growth has been very good," he said. "Most counties will see more increases in revenue from developed land than they would get from the subsidies."
The state budget will be enacted during the summer of 2007.