Short-term plan will use $10 million of taxpayer money

By WES SANDER

Capital Press

Stakeholder groups expect a short-term funding plan will keep the Williamson Act alive long enough for a long-term plan to replace it.

The immediate plan involves a $10 million allocation of taxpayer funds in a trailer bill to the recently finalized 2010-11 state budget. That's less than a third of traditional funding for the popular farmland-preservation statute.

But a bill signed by the governor in September could make up much of the difference for individual counties, if they take advantage of its provisions.

Through the four-decade-old Williamson Act, the state pays counties subventions that compensate for much of the property-tax revenue lost when they enter contracts with landowners to preserve farmland in exchange for lower tax assessments.

Earlier this year, Gov. Arnold Schwarzenegger proposed keeping the program unfunded in the 2010-11 state budget. He first vetoed the program's $28 million fund last year, when the legislature sent him a budget he deemed too big. The fund's allocation had totaled $35 million before lawmakers trimmed it during budget negotiations.

The veto has left counties scrambling to cover the loss of revenue, with some having threatened to start the process of non-renewal on landowners' contracts, a process that is difficult to reverse.

A group of stakeholder interests reached an understanding with Schwarzenegger that the subvention fund could receive some taxpayer support in the 2010-11 budget if a plan were formulated to wean the Williamson Act from the state's general fund.

But time was running short for the current budget cycle, said Bill Geyer, executive director of the Resource Landowners Coalition, one of the groups involved. Needing more time to collect data and sift ideas, the stakeholders turned instead to a short-term plan.

"It was clear that there wasn't the time to figure out a permanent program," Geyer said. "So the interim plan became more front and center."

That plan centered on AB2530, a bill by Assemblyman Jim Nielsen, R-Gerber. Under Nielsen's bill, a county could undertake one annual renewal of a landowner's contract without the additional year that is normally added. It could thereby shrink its Williamson Act contracts to nine-year terms, increasing the values of contracted properties by 10 percent.

A property's annual tax bill would therefore increase, along with the county's tax revenue, until the state's subvention fund recovers or the bill's 2015 sunset date arrives. At that point, counties would be required to add two years to renewed contracts, restoring their 10-year terms and smaller tax bills.

"In theory, it ought to be worth about $20 million," Geyer said, referring to analyses summing up the revenue increases that counties could see if they all took full advantage of the provisions.

The bill "is what gave the landowner community and CCA and Farm Bureau a stronger leg to stand on," said Matt Byrne, spokesman for the California Cattlemen's Association. When landowners offered to take a financial hit to keep the program functioning, it solidified the Williamson Act's bipartisan support, Byrne said.

"That full-court press, over time, has created a significant level of legislative support," Byrne said.

But the provisions likely won't be universally adopted, said Kathy Mannion, legislative advocate with the Regional Council of Rural Counties. Complex financial circumstances could cause some counties to seek other options. And depending on contract renewal dates, some may be unable to take advantage of the bill's provisions until next year.

"I know there are a number of counties that would like to, and some are proceeding," Mannion said. "But some may have to wait until 2012."

John Gamper, director of taxation and land use with the California Farm Bureau Federation, said momentum from ongoing efforts will lead to a permanent funding plan by the time Nielsen's bill sunsets.

"Within three to four years we're going to have the Williamson Act back on track," Gamper said.

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