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MAY 18, 2007 Friday Review, California Farm Bureau Federation

Governor Schwarzenegger added some new moves to his annual State Budget dance with the Legislature but wound up stepping on agriculture’s toes. In his proposed May revision of the budget he submitted in January, the governor stunned the agricultural community eliminating the funding for the Williamson Act subvention. This is the first time in four budget cycles that the governor chose to eliminate the funding for the state’s most effective farmland protection program. The official explanation contained in the document reads:

The May Revision proposes a decrease of $39.1 million General Fund associated with elimination of Williamson Act subsidies. These subsidies partially backfill property tax revenue that local governments forfeit when they enter into contracts with landowners to not develop land in exchange for reduced property tax assessments. Subsidies are funded at $5 for each acre of prime agricultural land covered by a Williamson Act contract, and $1 for each acre of non-prime agricultural land so covered.

The Administration encourages local governments to continue their Williamson Act contracts, since they help preserve agricultural land from development. However, due to the state's fiscal condition, the state cannot continue to provide funding for this program.

The only logical explanation for this decision to cut the funding, for what many believe to be California’s most successful environmental program, is that governor needed to add an item to the list of things that the Legislature would want to fund. Republican Assembly members’ districts would be particularly hard hit by the cuts because they tend to represent the rural areas of the state. Of course, Republican votes are needed to approve the budget because it takes a two-thirds super majority. The fact that the cut may have been politically motivated doesn’t make it any less real and Farm Bureau is taking it very seriously. We are working to help educate the many new members of the Legislature who were not in Sacramento the last time we fought to restore the funding in Governor Davis’s proposed budget in 2003. A Farm Team Alert has been prepared and the initial response has been very encouraging. If you’re not a Farm Team member, please become one and respond to this urgent action request or click here.

Perhaps the most frustrating aspect of this proposed cut is the clear disconnect between eliminating the funding and the Administration’s support for the program. Rural counties cannot afford to continue to offer the program without the subventions to backfill for the foregone property tax revenue. The subventions can be a significant contributor to rural county coffers yet it is only .036 of one percent of the state’s budget. Also, if the counties decide to withdraw from the program, more land will be subdivided for home-sites, many in critical watershed areas, driving up the cost of fire protection in the State Responsibility Areas. Finally, in order to reduce California taxpayers' property tax burden, the California Constitution exempts homeowners from paying property taxes on the first $7,000 of the assessed value of their principal place of residence. The constitution also requires the state to reimburse local governments for revenues lost due to the homeowners' exemption ($70 per home) and that amounts to nearly $467M per year. If just one percent of the Williamson Act’s 16M acres of protected land converts to residential subdivisions at five units to the acre, the state would be required to pay an additional $56M in the Homeowner’s Property Tax Relief subvention. So by eliminating the $39.1M in Williamson Act subventions, the state could actually lose hundreds of millions of dollars and that doesn’t even consider the potential negative impact on the $36B in farm gate value and it’s contribution to California’s gross state product.

UFW sponsored legislation to circumvent the secret ballot election process under the Agricultural Labor Relation Act and is now on the Senate Floor awaiting action for passage to the Assembly. The measure, SB 180 (Carole Migden, D-San Francisco), would strip farm workers of their democratic right to a secret ballot election in deciding whether they want union representation. A union, at its own discretion, could then replace secret ballots with an unprotected process where union organizers would get employees to sign authorization cards stating they want a union. This process would totally undermine the right of employees to cast a secret ballot free from the fear of intimidation or coercion. Please contact your State Senator, urging a "NO" vote on SB 180. Refer to the "SB 180 Farm Team Alert" for a sample letter or click here.

The Senate Appropriations Committee moved all three of Senator Dean Florez’s food safety bills to the suspense file this week. CFBF remains opposed to SB 200, SB 201, and SB 202 because they are all duplicative of what is included in the industry led Leafy Green Marketing Agreement and are therefore unnecessary. Appropriations Committee staff estimated that SB 200 would add $6.4 million of general fund costs to the state for the 2008/2009 budget year alone, SB 201 was estimated to cost $1.7 million of general fund dollars for 2008/2009, and SB 202 was estimated to cost $230,000 in 2008/2009. The committee will take up the suspense file the week of May 28th.

The Assembly Appropriations Committee voted on AB 1634 (Lloyd Levine, D-Van Nuys), the California Healthy Pets Act, this week. AB 1634 requires that all dogs and cats be spayed or neutered by four months of age unless they are eligible for, and obtain, an intact permit from their local animal control agency. The bill passed out of committee 10 – 6 with Democratic Assembly Member Ma joining the Republicans in voting no and Democratic Assembly Member Caballero abstaining. In addition both Assembly Member Davis and Lieu, who voted for the bill, expressed concerns with the impacts the bill would have on dogs used by law enforcement and stated they may change their votes if their concerns are not addressed by the time the bill reaches the floor. CFBF remains opposed to the bill due to its impacts on dogs used for herding and guarding livestock. The bill now moves to the Assembly floor.

AB 1100 (Ira Ruskin, D-Redwood City) and SB 63 (Carole Migden, D-San Francisco) were heard by the Assembly and Senate Appropriations Committees respectively this week. Both bills were placed on the suspense files as they create new costs for the state due to the inspection and enforcement burdens the state would take on, should the bills ultimately become law. The committees estimated that the ongoing annual costs for the state to be in the range of $225,000. These bills are nearly identical and both require the mandatory labeling of meat and milk from cloned animals or their progeny. CFBF has significant concerns with requiring labeling of a product that is no different from its conventional counterpart. Mandatory labeling of cloned product will ultimately act to ban the technology due to increased identification and tracking costs. CFBF is opposed to both AB 1100 and SB 63.

SB 974 (Alan Lowenthal, D-Long Beach) is being held in the Senate Appropriations Committee because it costs the state more than $150,000 to implement. The decision will be made by the end of the month whether the legislature deems these costs worthy and allows the bill to move to the Senate floor and ultimately to the Assembly. Lowenthal’s bill would impose a fee of $30 for each "twenty-foot equivalent unit" (TEU) shipping container that is processed at the L.A./Long Beach Port Complex and the Port of Oakland. The cost of agricultural production in California is already higher than out-of-state and foreign competitors, which puts California growers at a competitive disadvantage. California’s farmers cannot simply increase the cost of their product when shipping costs increase. Instead, prices are often set on an international market that does not fluctuate based on California’s business climate. While the intent of SB 974 is not to hurt California’s farmers, the results are unmistakable – California farmers will be less competitive on an international level. SB 974 is a one-size-fits all approach that is inappropriate for financing the infrastructure improvements and environmental mitigation projects created by California’s growing population and economy. Farm Bureau is opposed along with a coalition of over a hundred businesses and organizations.
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