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.

“We encourage anyone who has been misinformed to contact a tax professional as the benefits are spelled out in the law,” Sanjay Wagle, CAR vice president of governmental affairs, said in a statement.

But farm advocates like Spiegel say the Attorney General’s Office and the Realtors didn’t sufficiently evaluate the measure’s impacts.

The Ryans weren’t paying close attention to the ballot measure as November approached, they said. There wasn’t much focus put on it in agricultural circles, and the hubbub of a contentious presidential campaign sucked up what attention they had for electoral politics, Andrew Ryan, himself a Realtor, said.

To the Ryans, a new tax bill steep enough to sink the ranch seems frighteningly possible. Ranching profits have never kept up with Sonoma County land prices, the Ryans say, not even close.

The last Ryan to make a living from ranching alone was Andrew and Kelly’s great grandparents. Walt worked for the city of Rohnert Park until his retirement. Joan continues to work as a nurse specializing in infection control. She had a busy 2020.

“There’s no profit in (the ranch) any more,” Walt said. Even in its heyday, the land never made for high-margin agriculture, he said. “You can’t produce that much,” he said. “It’s hilly country and that’s just how it is.”

There is room to debate what taxes generational Sonoma County farmers could pay, said Pamela Angleman, a seventh-generation landholder in the same area as the Ryans. Such families should contribute fairly to public services, she said.

But Proposition 19 did not come with any analysis of the risk to family farms and the potential accompanying changes to the region’s character, she said. Compared to those possible changes, “would it be more beneficial (to the public) to just get higher taxes every time somebody dies?” Angleman asked.

No one, she said, has answered that question.

A state senator is now trying to slow the measure’s implementation. Sen. Patricia Bates, R-Laguna Niguel, introduced a bill to delay the implementation of the changes to intergenerational property transfers by two years. The delay will allow the Legislature and officials who assess property taxes time to clarify aspects of the measure, Bates said in a press release. It will also give families time to consult with attorneys about how their properties will be impacted, she said.

The California Association of Realtors and the California Professional Firefighters oppose the bill, according to a letter signed by representatives of both organizations. The bill “seeks to circumvent the will of the voters,” the letter said.

Farm policy experts like Spiegel are focused on another bill brought by Senate Majority Leader Robert Hertzberg, D-San Fernando. Hertzberg’s bill seeks to clarify aspects of Proposition 19, and the senator is trying to bring lobbyists for the farming, firefighting and real estate associations to a compromise, Spiegel said.

Andrew Ryan wants to see a fix that doesn’t hurt one constituency to help another. “The solution is help our firefighters, keep homes moving and don’t break up family ranches,” he said.

Walt Ryan knows ranchers whose children sold out, selling off family land in pieces or all at once to developers who often subdivide it to build individual homes. Sonoma County has placed limits on how rural farmland can be subdivided, but has not banned the practice. A ranch north of the property became 50 or 60 homes, he recalls.

The Ryan children say they have no intention to sell if they can avoid it. Barnett lives in the farmhouse with her husband and the couple is dedicated to ranching. Her husband, a former Colorado cowboy, breaks horses as a side business. She feeds hay bales to the Ryans’ cattle out of the back of a 4-by-4 and said she hopes to turn more of a profit out of the property.

Andrew Ryan started selling single-family homes but has moved into ranch and farm properties, drawn, he said, to “the dirt.” He rarely if ever sells such properties to people pursuing the agricultural work, but instead those seeking and able to afford open space and views, he said.

The younger Ryans grew up spending weekdays at school in Santa Rosa and weekends on the ranch.

Walt remembers his son driving a pickup in low gear over the ridgetop, back when Andrew was so little that his feet barely reached the pedals. Walt would throw hay out of the truck bed for the cows, guiding his son with shouted rights and lefts.

“His heart is here,” Andrew’s mother said of her son.

You can reach Staff Writer Andrew Graham at 707-526-8667 or andrew.graham@pressdemocrat.com. On Twitter @AndrewGraham88