Butte County Holds Line on Ag Surcharge
Nov 05, 2025 11:51AM ● By Susan Meeker
The surcharge, known as the AB 1265 direct charge, allows the county to recoup 10% of the property tax savings granted to landowners under the Williamson Act. Designed by Freepik, www.freepik.com
OROVILLE, CA (MPG) - The Butte County Board of Supervisors on Oct. 28 opted to maintain a longstanding property tax surcharge on agricultural landowners, choosing to revisit the issue during next year’s budget cycle rather than risk cuts to recently restored law enforcement and other services.
The surcharge, known as the AB 1265 direct charge, allows the county to recoup 10% of the property tax savings granted to landowners under the Williamson Act, a state program created in 1965 to preserve farmland and open space. In exchange for agreeing not to develop their land, property owners receive substantial tax reductions through long-term contracts with the county.
Butte County adopted AB 1265 in 2012 after the state stopped reimbursing California counties for lost revenue. The law shortened Williamson Act contracts from 10 to nine years and allowed counties to collect 10% of the landowner’s tax savings. Officials said the compromise preserved the program while helping fund essential services.
The board’s discussion began in August after farmers requested relief from rising property tax bills, citing sharp increases in recent years and the cumulative burden of sales taxes, regulatory fees and reassessments. Several landowners called on the county to eliminate the AB 1265 charge, arguing that it undermines the original intent of the Williamson Act.
Gridley farmer Ryan Schohr urged the board to reconsider the charge, citing the mounting financial pressure on agriculture. He said farmers are now taxed more heavily than before, with Measure H significantly increasing the county’s share of sales tax on equipment and supplies.
“We as farmers are paying double the sales tax now to the county,” Schohr said, referencing a $10,000 increase on a single combine purchase. “Agriculture has paid a lot for the promises made to this county to protect law enforcement.”
Chief Administrative Officer Andy Pickett warned that eliminating the charge could destabilize essential services, a concern shared by other rural counties across California. Since the state ended reimbursements in 2010, more than a dozen counties, including Colusa, Sutter, Yuba, Fresno, Kings and Tulare, have adopted AB 1265 to offset lost revenue.
“Ending the AB 1265 direct charge would mean an immediate loss of approximately $700,000 annually in general purpose, or discretionary, revenue going forward,” Pickett said. “General purpose revenue supports critical local priorities, including public safety and the library, and a reduction in GPR would require cuts in these programs.”
Pickett reminded supervisors that voters approved the Measure H tax increase in 2024 by 68%, agreeing to restore services that had been reduced for years. The half-cent sales tax now generates $44 million annually, and every dollar has been budgeted toward rebuilding service, including reopening winter fire stations, restoring deputy sheriff positions and patrols, repairing aging facilities and bringing salaries to competitive levels across departments including probation, prosecution and libraries.
Pickett said the recent rise in tax bills for Williamson Act participants was probably a one-time event due to state capitalization rates and new groundwater fees. He said the county anticipated that Williamson Act landowners would see a decrease in their tax bills next year.
Supervisors took no formal vote but directed staff to revisit the issue during the fiscal 2026 budget process.
Board Chair Tod Kimmelshue said he would still like to hear from other agriculture groups before a decision is made. Others defended the current policy and warned that reversing AB 1265 would mean reversing course on the very services voters overwhelmingly chose to restore.

















