Amid Prop. 19 uncertainty, family fears for 134-year-old Sonoma Coast ranch
On a ridgeline northwest of Bodega, cattle dot a sloping field, oblivious to the soaring, million dollar view and waiting, as livestock here have for more than a century, for the nourishing hand of a member of the Ryan clan.
In a hollow below the ridge, smoke curled from a farmhouse chimney and a rusted cattle chute waited for the next branding. The Ryan Ranch has not gone unchanged — the livestock have shifted from sheep to cattle, and timber harvesting, once a moneymaker, has been abandoned. Other things, like the farmhouse and general sleepy bucolicism, have stayed the same since the ranch’s founding in 1887.
The Ryans would as soon keep it that way, particularly when it comes to the name on the deed. “I’ve always said, ’over my dead body are we going to lose the ranch,’” Joan Ryan, 71, said.
Her children, Andrew Ryan and Kelly Barnett, are next up in a line of succession for the more than 800 acres that stretches back to Andrew’s great-great grandfather.
But Proposition 19, a change to tax codes narrowly passed by voters in November, threatens that legacy, farm advocates say.
The tax change has sent farm bureau policy wonks, tax lawyers and officials at the state’s Board of Equalization, the agency that governs tax issues, scurrying to understand the impacts to small family farms and ranches. The California Association of Realtors, which led the campaign for the measure’s passage, is adamant it won’t hurt family farmers and in fact benefits them.
Farm advocates disagree. California’s steep land prices, particularly in counties like Napa or Sonoma, mean the fair market value of farm land vastly outstrips what family farmers have been assessed at — in cases like the Ryans, for generations. Under the new law, some properties could be reassessed at current market value when they pass to heirs. Even with buffers in the law, the lack of profitability of the farms means any alignment of property taxes with current market values would be “a death sentence,” California Farm Bureau policy advocate Robert Spiegel said.
The new tax rules apply to any property transfers that weren’t filed by Feb. 16. That tight deadline led to a rush on the Sonoma County assessor’s office by parents trying to file transfers to their heirs.
The Ryans chose not to rush a transfer. They learned of the rush of transfers late and weren’t able to see their lawyer in time. “I don’t know if attorneys let people know or we just had to know through osmosis,” Joan Ryan said.
On their own, they didn’t understand the impacts of Proposition 19 and still don’t. And they weren’t ready to face the decisions that come with transferring a family ranch onto the next generation.
With the deadline passed, the Ryans and other families that chose not to rush a transfer are now vulnerable to whatever results from the swirl of legislation, regulation writing and most likely litigation, Spiegel said.
“This could really take years to provide people the clarification and certainty that’s needed,” Spiegel said. In the meantime, small family farmers drift in uncertainty.
Proposition 19 allows people over 55, disabled and those whose homes were hit by wildfires or other disasters to buy a new home anywhere in California and carry their old property value with them. Realtors pushed the measure, which is likely to drive home sales, while firefighters also backed it as a revenue generator for their work. The measure is designed to increase overall property tax revenues, but shift some of the burden from people who move into new homes and place it upon people who inherit property. The gains to public coffers, estimated in the tens and even hundreds of millions, are largely directed toward fire protection funding.
The ballot measure passed by a slim margin, with 51% of the electorate approving it last November. A previous measure, without the fire protections, failed by a wide margin in 2018.
“Special interest groups — in this case, California’s realtors — craft measures and policies that read like fairytales but are developed to line their pockets,” Sonoma County Farm Bureau executive director Tawny Tesconi wrote in a message to her members. In the post, she argued Proposition 19 will have “severe financial consequences” for children inheriting property from their parents. “I fear Prop 19 will hurt dairy, livestock, and poultry operations the hardest,” she wrote.
The California Association of Realtors argues such worries are unfounded. The ballot measure came with an evaluation from the California Attorney General’s Office that found it will in fact “expand tax benefits for transfers of family farms,” they note.