Local farmers and ranchers will likely keep their tax breaks provided under the Williamson Act, even though state officials have yanked funding for the program.
The Williamson Act, enacted in 1965, gives property tax breaks to people who use their land for active agricultural production. To
make up for the lost property taxes to local governments, the state historically subsidized county general funds.
During this year’s budget crisis, however, Gov. Arnold Schwarzenegger used his line-item-veto power to eliminate funding for the program but not the program itself—$1,000 was left budgeted statewide for the Williamson Act. In previous years, Schwarzenegger threatened to cut the program entirely but never pulled the trigger. This year, he cut the program along with its $27 million pricetag. The move effectively stuck county governments with the bill.
In SLO County, at least for now, the program is safe. Loss of Williamson Act funding means about $1 million county officials now have to make up with other money from an already deflated local budget. They plan to use contingencies (emergency funds) to keep the program running through the year.
“It is a contract and the county has to honor the contract just the same as the private sector,” said Joy Fitzhugh, legislative analyst for the county Farm Bureau.
Williamson Act contracts last 10 years. The provision of the law is designed to prevent people from abusing the system for short-term tax cuts. It also means county officials can’t simply dismantle the program on a whim when state subsidies are lost.
Williamson Act tax breaks are also designed to entice farmers and ranchers to preserve agriculture and open space rather than develop their land for houses or other purposes.
There’s no long-term plan yet to maintain the funding if the state never restarts the subsidies. County supervisors will discuss on Aug. 25 how to handle the Williamson Act and other cuts, about $16 million in total due to the latest state budget. But County Administrator Jim Grant said preserving ag land is a priority in the county and he expected it would be safe through the next fiscal year.
What about next year and the year after that? If state officials don’t put funding back into the program, how long can local governments afford to pick up the slack? Fitzhugh said the unknowns present concerns for local farmers.
“If the program itself was eliminated, it’s questionable what the actual outcome will be,” Fitzhugh said. “We really don’t have a firm handle on what would happen.”