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The 'Terminator' eyes Cali farmland

Schwarzenegger to California farmers: Considuh this a divorce

Posted by Tom Philpott at 10:30 AM on 27 May 2007

There's a fair amount of debate on Gristmill about how much green cred to give the Governator -- that A-list action hero of enlightened Republicanism.

I don't follow California politics closely enough to venture an opinion. But I do know that promoting a policy that will result in yet more suburban sprawl and evict small- and mid-sized farmers from their land -- all in an effort to save chump change from the state budget -- hardly does Schwarzenegger credit.

Over on Ethicurean -- which has been running great stuff lately -- blogger Mental Masala lays out Schwarzenegger's retrograde scheme.

Masala notes as suburban sprawl "roars into" to farm country, property taxes leap. If farmers get taxed on the value of uses their property could have -- say, a nice big-box store with plenty of parking spaces for Governator-style Hummers -- then those farmers will likely be forced to sell. It turns out that there's a lot more money -- and hence, in our culture, "value" -- in peddling cheap crap made halfway around the world then there is in growing food for people to eat.

Since the 1960s, Masala notes, farmers have been protected by something called the "Williamson Act," which "helps preserve farms and ranches by allowing those who enroll in the program to have their land taxed at a rate based on actual use, not potential use. The state then compensates cities and counties for the revenue loss."

And it's just this program -- which costs taxpayers $40 million in an overall budget of $145 billion -- at which the Governator is aiming his AK-47.

Masala's post contains info on how to raise your voice against this absurdity -- as well as links to maps depicting the vast swaths of farmland that would face extinction if Schwarzenegger gets his wish, including counties that house some of California's most celebrated and productive small farms.

It's all about corporate welfare

Schwarzenegger's administration is dominated by the old henchmen and advisors of the business-can-do-no-wrong, immigrants-and-civil-rights-are-wrong Wilson administration.  They tried to pick up where they left off by having Arnold go on a naked union busting spree, which might have made some headway until he made a crack about kicking the butts of overworked nurses that even conservative, senior citizens want well treated and well rested when they check into the hospital.  As it turned out, Arny got his butt kicked in the next election, in which most of the initiatives he was pushing went down in flames.

His new, and much more successful tactic is to dole out corporate pork and priorities in the guise of green and people friendly policies.  For example, his Million Solar Roofs initiative was pushed and heralded by environmental, liberal, and progressive groups as a big leap forwarded.  Apparently, they still haven't read the fine print.  This is a big subsidy aimed primarily at California solar wholesalers and large developers that could be made to do much more environmental and energy good by passing HVAC and insulation performance standards recommended by the California Energy Commission but never given a thought by Schwarzenegger because that would benefit skilled labor without handing big business another pork sandwich.  Or, and did I mention that the government funded Million Solar Roofs initiative, unlike most government programs, has no requirement that any union labor be employed?  Yep, that's a million union busting roofs those liberals and progressives just worked to put in place.

Other plans include big public works and highway projects that will primarily enrich and benefit big businesses and favored contractors and developers who give generously to Arny and other Republicans, but have some appeal to individual drivers, consumers and home buyers, too, which is how the projects are sold in public.  Meanwhile, promises about shoring up education funding he raided, or actually reversing environmental damage when there seems to be no easy way to do so in the pursuit of more corporate welfare never see the light of day.

It's easy to spot once you understand the strategy.  And now you do.

Its more complicated

Thanks for presenting this information about the Williamson Act. The Williamson Act has been an important and effective tool for the preservation of farm and ranchlands in California for more than 40 years and should be fully funded in our state budget. I encourage everyone reading to contact legislators and tell them to preserve the Williamson Act.

But the sad truth is that the Williamson Act, and the limited amount of local property tax relief it provides, is woefully inadequate to protect farm and ranchlands in California from development.  Agriculturalists may see property tax relief of a few dollars and acre as a result of the Williamson Act. An analysis done in Plumas County California shows a landowner savings of about $1.37 per acre of ranchland. For the average landowner this is welcome relief, but nowhere near enough to affect their long-range decisions about land management and eventually sale for rural residential subdivision.

The real problem in California is much more complex that the retention or elimination of the Williamson Act.

Proposition 13, passed by California voters in 1978, capped property tax to no more than 1% of the value of real property per year. Prop 13 also created a new 2/3 threshold for future increases in taxes, including sales and income taxes, and capped the growth of value in real property to no more than 2% per year. That means that if your real estate base value was $100,000, and real value increased 25% in 5 years (to $125K) your tax would be calculated on the capped 2% per year (or $110K). Multiply this inequity over 30 years in a state with 60% home ownership and you begin to understand the problem.

This had the effect of lower property taxes in California by approximately 57% and disrupting the entire finance structure of the state.

It does not take a rocket scientist to figure out what this did to the financial structure of the state. Property owners were protected and enriched by Prop 13, but all kinds of new taxes were created that encouraged the conversion of land from agricultural uses to rural residential, commercial and industrial uses.

Property owners who owned property for a long time have benefited from inequities built into the system in the amount of local property tax paid based on reassessment at time of sale, leading to dramatic differences in taxes paid on similar properties.

Commercial real estate developers benefited by keeping property in the same corporation while deeding or merging it to new owners, thus retaining lower property tax rates.

Affordable housing has disappeared as the cost of development of new property has skyrocketed in order to make up for the tax base lots with the passage of Prop 13.

California education was gutted as local tax revenue declined and new schemes to fund education through state government were concocted.

Today in California cities and counties compete like vultures for sales tax dollars (as evidenced by the dueling big box stores circumnavigating our urban centers), for transient occupancy tax dollars (as evidenced by the sprouting cookie cutter lodging centers facing the big box retailers) and for impact fees (as evidenced by the trading of corporate welfare for sales tax dollars by negotiating fees through development agreements).

The bottom line in California is that the property tax collected does not even begin to pay for the services in the form of infrastructure, public safety and public good that property owners receive.

All of this leads to the annual dance. The governors (Davis and Schwarzenegger) propose the elimination of services and taxes to local governments, the locals scream unfair and negotiate a deal at the last minute, the Williamson Act (and other proposed cuts) get saved at the last minute and everyone thinks they have done something important.

Meanwhile the core issue, the unfair and unconscionable government subsidy of services to property owners through Proposition 13, which is the greatest welfare program ever perpetrated on the citizens of California, is unchanged and unchallenged. The poor, the ill housed, those without health care and the clients of public education suffer.

The proposals to kill the Williamson Act will continue, year after year, until California voter overturn Prop 13 and come up with a more fair and equitable tax structure that appropriately shares tax revenue between local and state government and eliminates the subsidy that favors the propertied over those starting out in life.  

Problems with long term thinking

(My Gristmill user name is meander, but I go by Mental Masala at Ethicurean.)  

Thanks for the link and coverage of this important issue.

A small bit of irony in Schwarzenegger's budget plan is that he has been one of the biggest boosters of the "California Grown" marketing project. He will have a hard time promoting California agriculture when visiting Japan or Europe if it is paved over. But then again, that's a problem for the future to tackle.  We can just keep up with the status quo of paving over farmland, right?  We'll just buy our vegetables from China or Argentina.

The inability of humans to recognize dire consequences of today's urban planning  decisions reminds me somewhat of the inability to realize that today's energy and transportation policies could have severe consequences in 10 or 20 years (i.e., climate change).

A May 19, 2006 article in USA Today called California city [Bakersfield] to expand boundaries illustrated this to some extent:


At a time when many areas of the country are trying to contain sprawl, the City Council won approval this year to expand an area chosen for development outside city limits that could nearly double Bakersfield's size in the years ahead.

[...]

Mayor Harvey Hall says Bakersfield has little appetite for higher-density developments and other urban design trends. "I certainly respect the interests of the smart-growth people," Hall says. "But as the mayor, I support prosperity. You just can't stop growth."

If traditional growth patterns persist -- opposition to large-lot, cookie-cutter sprawl has been muted but is on the rise -- it will mean further loss of some of the world's most productive farmland. Bakersfield sits at the southern end of the flat, fertile Central Valley, a 400-mile-long food machine that provides much of the nation's fruit and vegetables.

[...]

Farmland is being urbanized across the valley, but nowhere as fast as here: 70,000 acres in 1988-2002, more than 7,000 acres in 2002-04, the state conservation department's most recent reporting period.

Last year, the department warned Bakersfield that it was illegally expanding in protected farmland. "They're as sprawl as sprawl can get," says Edward Thompson, American Farmland Trust's California director.




Related story

Yesterday's SF Chronicle had a story on the larger picture.  On the plus side, at least the issue is starting to get more attention.  One of several notes I could make on the minus side is that while a majority of California cities (the League of Cities membership) may be nominally in favor of sprawl restrictions, they are opposed to doing anything to restrict the minority that continue to want to sprawl like crazy.  This is based on fine-sounding arguments about "local control."  Of course there is no quote in the story noting that continuing sprawl is simply insane.

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