Napa County is disputing grand jury findings that agricultural tax breaks have lax local oversight, cost taxpayers and do little to buttress existing laws protecting wine country farmland from being paved over.
The Napa County Grand Jury subtitled its June report on the Williamson Act in Napa County “subsidizing a lifestyle.” It noted a witness from the Assessor’s Office called the local program “welfare for the rich.”
Meanwhile, the Napa County Board of Supervisors doesn’t appear to understand the cost to taxpayers. That comes to about $60 million in lost tax revenue over a decade that could have gone to cities, schools and the county for local services, the grand jury said.
While the grand jury worries that the Williamson Act subsidizes the lifestyles of wine country elite, the county sees the program as improving the quality of life for the public at large.
“A sound and secure system for preserving Napa agricultural land and the open space qualities it provides will be far more valuable to future generations than limited short-term financial gains,” the county response said.
The Napa County Board of Supervisors approved the county’s defense of the Williamson Act on Aug. 14.
In 1965, California passed the Land Conservation Act, commonly called the Williamson Act. The law allows counties to offer property tax breaks to farmers in return for pledges to keep their land in agriculture for 10 years, with automatic annual renewals unless one party opts out.
The goal is to keep farmland from being paved over with subdivisions and strip malls. Farmers can pay taxes based on agricultural value of their land rather than a value that includes development potential.
But the Williamson Act in Napa County provides no more protection from development than county land use laws, the grand jury said. For example, county agricultural land use changes under Measure P must be made through ballot initiatives.
“Despite the limitations on development from the County’s planning and zoning rules, Napa County agricultural land has become some of the most highly prized and valued agricultural land in the world,” the grand jury report said. “Yet the county taxpayers are subsidizing the owners of that land.”
Long-time vineyard owners pay taxes based on Proposition 13 land value rather than the agriculture value because it is lower, the grand jury said. The Williamson Act tax breaks most benefit the wealthy and corporations making recent land buys—those who can most afford to pay market-rate taxes.
Napa County responded that county laws and the Williamson Act aren’t duplicative, but rather complementary. They mix short-term and long-term benefits to provide greater protection against urban sprawl.
“Napa County contains some of the most valuable farmland in the country, but urban development can be worth five to 10 times more on a per-acre basis,” the response said.
Some farmers without the tax break would be unable to generate sufficient money from agriculture alone to pay taxes and land maintenance expenses, the response said. It mentioned land used for livestock grazing as an example.
Without the Williamson Act, development pressures could make county land use policy challenges more dynamic. The general plan is only as strong as the public support it inspires, the response said.
“The loss of the Williamson Act would weaken farmers as a key component of public support,” it said.
The grand jury found that Williamson Act tax breaks cost the county, its cities and its schools about $6 million annually in tax income. The Board of Supervisors lacks adequate information about the total lost property tax revenue, its report said.
But the county responded that the tax money hasn’t been lost. Rather, the tax breaks incentivize actions consistent with the broadly supported goal of preserving agriculture.
The county declined to follow the grand jury recommendation of commissioning a cost/benefit analysis to help determine continued county Williamson Act participation. Protecting farmland prevents conversion to the highest and best economic use, which reduces potential government revenues, its response said.
“However, maximizing government revenue is not the defining aspect of Napa’s quality of life,” the county response said.
Open space, habitat conservation and resource management values do not easily factor into a cost-benefit analysis. A rural landscape prized by both residents and tourists cannot be easily accounted for in a ledger, the county said.
The grand jury found that Williamson Act contract enforcement is non-existent. Planning and Assessor staff haven’t told the Board of Supervisors about undersized parcels, parcels without agricultural income and property owners who fail to supply information required by law.
Again, the county defended itself, in part by saying supervisors can’t feasibly learn about every county rules violation. The Board of Supervisors on May 8 directed county officials to increase efforts to ensure Williamson Act compliance.
County officials have identified 64 Williamson Act contracts where no agricultural use appears to be occurring on the parcel. The county will file notices of non-renewal if the owners cannot provide evidence otherwise, the county response said. These are 9 percent of the 692 Williamson Act contracts.
The grand jury also found that Assessor John Tuteur’s office lacks adequate conflict-of-interest procedures regarding Tuteur’s properties, with unqualified personnel assigned to check the work. Tuteur’s family owns a ranch under a Williamson Act contract.
In separate action, the grand jury is calling for Napa County Superior Court to remove Tuteur from office in part because of Williamson Act-related conflict-of-interest allegations.
In the county’s grand jury response, Tuteur declined to revise conflict-of-interest procedures for employee-owned properties. The current ones are sufficient, the response said.
August 21, 2018
Napa Valley Register
By Barry Eberling
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