The loss of subventions from the state to make up for lower property taxes in 2009 on farms enrolled in the Williamson Act will take another $1.2 million out of Merced County’s $124.1 million discretionary fund and leave future budgets vulnerable to similar revenue losses for at least a decade.

Like 53 other counties in the state that voluntary participate in the California Land Conservation Act of 1965 (Williamson Act), Merced County supervisors are grappling with the uncertainty of a program that is effective because of it’s long-range implications. Farmers participating in the tax reduction contract pledge to keep the land in agriculture for 10 years.

That big horizon thinking has been successful in preserving 16 million acres. However, Governor Arnold Schwarzenegger’s line item veto pen cast a shadow over that partnership by eliminating $27.7 million in reimbursements or subventions to counties, while leaving $1,000 in the program as a placeholder.

Now counties, who are the signers with farmers on the contracts and will suffer the property tax loss, must decide if they can continue the program in the face of questionable state commitment going forward.

The question brought about a long discussion at the August 18 Merced County board meeting where farmers testified to the importance of taxation linked to revenue-generation of the property rather than market value for housing.

In the end, supervisors decided not to accept any new contracts this year while they joined California State Association of Counties (CSAC) and the California Farm Bureau Federation in lobbying to restore funding.

The board also changed the tax reduction from 30 percent for prime growing land and 10 percent for nonprime to 5 percent for all enrolled acreage.

“If the lobbying isn’t successful, the board said they would reconsider continuing the program,” said Merced Director of government Affairs Katie Albertson.

In Yolo County, the Board of Supervisors will consider strategic use of the agricultural preservation tool, according to David Morrison, Yolo County Planning and Public Works Department Assistant Director.

The county has made open space a priority, but hopes to lower the local cost by reducing taxes only on those parcels under the most pressure to develop or in key buffer areas around cities.

“Williamson Act has been a crutch that worked for a long time, but now we need to look at other tools to preserve open space,” Morrison said.

Participating counties are in the planning stages now for how to deal with the one-year loss and future uncertainty. Some may decide to non-renew across the board; others are looking for places to cut elsewhere to stay in the program.

“There is no particular pattern at this point,” said Karen Keene, CSAC legislative representative.

“Discontinuing the subventions may force many counties to non-renew Williamson Act contracts. A domino effect will then ensue, farmer’s tax bills will increase and expendable income will decrease, potentially leading to a weakening of local agricultural-based economies where few alternative industries exist. In addition, restoring the funding will demonstrate the state’s desire to be recognized as a leader on climate change, “smart growth” and other environmentally progressive initiatives,” Keene said.

The members of the Agriculture and Natural Resources policy committee recommended to the Executive Committee that they not support an acceleration proposal because it would facilitate non-renewal and possibly reduce pressure to restore funding.

JT Long can be reached at