When Louisiana voters head to the polls for Saturday’s primary (Sept. 30), they will be the first in the nation to weigh in on whether to roll back last year’s U.S. Supreme Court decision on eminent domain – a burning property rights issue for landowners across the country.
Louisiana and 11other states will vote this election year on eminent domain measures that would limit government’s powers to force the sale of private property for another private use or economic development. The other states – Arizona, California, Florida, Georgia, Idaho, Michigan, Nevada, New Hampshire, North Dakota, Oregon and South Carolina – will vote in the general election on Nov. 7. Six measures are legislative referendums and six are citizen initiatives.
Meanwhile, an even more fiery property rights issue will confront voters in four Western states. Ballot measures will determine whether Arizona, California, Idaho and Washington follow Oregon’s lead and begin compensating citizens when government regulations lower the value of private property.
In 2004, a constitutional amendment made Oregon the only state to allow payments for so-called “regulatory takings.” The
result has been more than 2,400 claims requesting more than $5.6 billion in compensation. Oregon’s law requires a government body to “pay or waive,” meaning it can waive the regulation instead of compensating a property owner for a diminished use of his land. In every claim so far that the state found to be valid, the government has chosen to waive the regulation, or give a partial waiver, rather than pay. However, there still are almost 80
lawsuits pending by those who disagreed with the state’s findings.
The backlash against eminent domain stems from the Supreme Court’s July 2005 decision in
Kelo v. City of New London, which allowed a local government to seize homes to make way for a development and the increased tax revenue it would generate. Since the
Kelo decision, 46 states have considered legislation to rein in local governments’ eminent domain powers and 30 passed bills to do so, according to the
National Conference of State Legislatures.
Arizona, California and Idaho would go a step beyond rolling back Kelo, limiting eminent domain and regulatory takings on the same measure, while Washington state’s initiative is a takings measure only. Montana was to have voted on a combined measure, but a judge declared the ballot proposal invalid.
Oregon’s law is retroactive, and all the claims so far have sought damages from old regulations. There have been no claims against any new regulations since the measure passed.
Should the new takings measures pass, it could mean in the future that a county interested in protecting wetlands could not ban a farmer from draining his land unless it were willing to pay him the difference of what his land would be worth if drained. If a new city zoning regulation limited a developer to building two houses on a plot where he planned to build four, he would be able to sue the government for the money the two additional houses would have generated.
This election will not be the first time a regulatory takings measure has been on a state's ballot. Inspired by then-U.S. House Speaker Newt Gingrich’s “Contract with America” – which included a promise to force the federal government to pay should any of its regulations lower property value – Arizona voters considered a takings measure in 1994 and Washington state voters in 1995. Neither passed, and no bill passed in Congress.
Opponents of California’s combined measure,
Proposition 90, say regulatory takings is a bigger concern than eminent domain.
“We agree with the ‘yes’ side that something does need to be done to address eminent domain abuses in California, but Prop. 90 is not the answer,” said Kathy Fairbanks, the spokeswoman for the
No on Proposition 90 campaign. “The measure includes a very extreme provision having to do with regulatory takings, which is completely unrelated to eminent domain and protecting homes, but is going to cost taxpayers billions of dollars as a result of junk lawsuits.”
But those at the
Yes on Proposition 90 campaign counter that in some ways, regulatory takings is a greater threat to homeowners than eminent domain. “At least with eminent domain, if you lose property, you get paid something,” said Dave Gilliard, the strategist for the Yes on 90 campaign. “With regulatory takings, you don’t get anything. One day your property’s worth something and the next day it’s worth less.”
Critics say eminent domain and regulatory takings are separate issues that should be on separate initiatives. At least one court agreed. Nevada’s eminent domain measure originally included a takings provision, but the state Supreme Court ruled it was not “‘functionally related’ and ‘germane’ to the subject of eminent domain” and removed that portion.
“The ballot measures that combine
Kelo and the so-called ‘pay-or-waive’ provisions are designed to try and exploit
Kelo and advance a different agenda that has nothing to do with eminent domain,” said John Echeverria, the executive director of
Georgetown Environmental Law and Policy Institute.
But John Tillman, the president of the Chicago-based libertarian group
Americans for Limited Government, which is backing property rights initiatives in eight states, including those with combined measures, views the effort as a public service.
“The activists who are leading these initiatives are quite open about how these measures protect citizens from regulatory takings,” he wrote in an e-mail. “The idea that the government should compensate owners when it destroys the value of homes and businesses is not a revolutionary one.”
Opponents say these ballot measures would hinder local governments’ attempts to protect the environment or plan for the future, and increase taxes because of more litigation. Two recent studies in Washington – one by the state and one by the University of Washington – found that the state’s takings
initiative could cost the state $7 billion to $9 billion.
But Lori Klein, the executive director of the campaign for Arizona’s
initiative, the
Homeowners Protection Effort, pointed out that litigation costs will increase only if local governments continue to issue regulations she says are “excessive.”
The government is “really overblowing what is the potential economic cost,” she said. “Really, if they are not excessively regulating, there would be very little cost.”
The question is whether the regulatory takings provisions will help or hurt the measures. During California’s June 6 primary, Orange County became the first jurisdiction to vote on eminent domain limitations, passing the measure with 76 percent of the
vote. But on the same day in the northern part of the state, Napa County voters rejected a regulatory takings measure with 63 percent of the
vote.
This year a majority of the states passed eminent domain legislation, but only eight introduced regulatory takings bills, all of which failed. Two of those states – Arizona and California – now have it on the ballot as constitutional amendments.
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By Elizabeth Wilkerson on Sep 29, 2006 3:32:20 PM
I've followed the eminent domain issue for some time, but knew very little about regulatory takings (which, might I say, seem more troublesome than eminent domain, and I didn't think that was possible!). Great story! And, Klein has a point: if governments aren't excessively regulating, they have nothing to worry about. But, that's the problem, isn't it? Way too much law, not enough order.
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