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March 23, 2003

Fertile ground for sprawl

Governor proposes cutting funds for farmland tax break

By Mark Martin, Chronicle Sacramento Bureau

Sacramento -- California's financial crisis threatens to end a state-funded program that eases the tax burden of farmers while keeping city sprawl from springing up near fields of wheat, corn and rice.

Faced with a staggering budget deficit, Gov. Gray Davis wants to cut the $39 million the state spends on the Williamson Act, which for decades has allowed farmers to pay lower taxes in exchange for a pledge to keep their land undeveloped.

Many land-use experts argue that the act has been a key tool in slowing urban growth around much of the state's farmland, but the governor says cash- strapped California can no longer afford it.

Davis' proposal is already meeting with resistance from a wide-ranging coalition of Democratic and Republican lawmakers, environmentalists, farmers and numerous county supervisors, who argue that the Williamson Act is essential to preventing the paving over of some of the richest soils on Earth.

The debate centers on the state's struggle to balance the needs of the agriculture industry with explosive population growth.

"Without (the act), I think you would have ended up seeing a lot of people building their McMansions out here, and that leads to all kinds of problems," said Charlie Rominger, who, with his two brothers, farms 2,500 acres of land about 15 miles west of Davis in Yolo County. Most of Rominger's land is enrolled in the Williamson Act, as is most of the surrounding farmland.

Created in 1965, the Williamson Act now protects more than half of California's prime agricultural acreage, mostly in the Central Valley.

Under the act, landowners enter into 10-year deals with counties, agreeing to keep their fields undeveloped either as farmland or open space. In exchange,

county officials assess the land at low rates, giving farmers a big break on taxes.

The idea is to help farmers stay in business when residential and commercial development sends property values -- and subsequently tax rates -- skyrocketing.

Since the early 1970s, the state has reimbursed counties for the taxes they are missing out on. This year, that amounts to $39 million for the more than 15 million acres protected under the act.

But in Davis' budget proposal issued in January, the state would end its reimbursement to the counties beginning July 1.

The governor supports the Williamson Act, a spokeswoman said, but is faced with plugging a whopping $35 billion deficit and had to make hard decisions.

"There's a lot of things in this budget that are tough calls," said Hilary McLean. "We have to cut back on all kinds of state spending, even in areas we've supported in the past."

If enacted, Davis' cut wouldn't mean the immediate death of the act. Even if counties decided they couldn't afford the lost tax revenue and ended the agreements this year, it would take 10 years to get out of the deals.

So in the short term, the governor is simply taking the state's money out of the arrangement. That has angered a lot of county officials already facing tight budgets.

"We'll be out $2 million that could go toward matching funds for federal grants or public safety," lamented San Joaquin County Supervisor Leroy Ornellas, whose Central Valley county has more than 450,000 acres enrolled in the Williamson Act.

What environmentalists, farmers and many lawmakers fear most is that counties will opt out of the program, leading to accelerated leapfrog development in 10 to 20 years, when the state's population is expected to grow by more than 11 million people. That growth would probably drive up property values in places like the Central Valley, sending farmers' tax bills soaring and making the lure of selling out hard to ignore.

"The concern is, without the Williamson Act, you'll see more sprawling suburban development," said Dan Fahey of the Bay Area group Greenbelt Alliance.

"That means more traffic, more air quality problems, and all the things open spaces help cure."

The act does have its detractors, who note that it has not deterred California's trend toward gobbling up farmland.

50,000 ACRES PER YEAR

The state loses as much as 50,000 acres of farmland a year to development. In San Joaquin County, one of the leaders in using the Williamson Act, Supervisor Ornellas can tick off at least five development projects under way near Tracy that will transform at least 4,000 acres of land into housing subdivisions or business parks.

But the act has curbed irrational development in rural areas by limiting the number of isolated subdivisions that might have sprung up among farms and ranches, according to Al Sokolow, a public policy specialist at UC Davis who studies farmland protection policies.

"It has really helped prevent a lot of leapfrog development," he said.

And the act is most popular in farm-oriented areas likely to face increasing development pressures in the future.

Counties in the northern and southern ends of the San Joaquin Valley, where encroaching development from the the Bay Area and the Los Angeles basin is driving up property values and threatening some of the best farmland in the world, have millions of acres under contract.

In the Bay Area, about 80 percent of land used for agriculture in Marin County is enrolled in the Williamson Act. Sky-high property values would kill most farming operations there without it, said Robert Berner of the Marin Agricultural Land Trust.

A group of 35 members of the state Assembly -- 19 Democrats and 16 Republicans -- have signed a letter opposing the governor's proposal.

"We know we have to make cuts, but let's not do this one," said Assemblywoman Lois Wolk, D-Davis, who wrote the letter. "This is the state's way of helping a farmer who wants to stay in farming, and I don't think we can just give that up."

E-mail Mark Martin at markmartin@sfchronicle.com.

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