The Jefferson Journal

Geoffrey F. Segal


 

Your Money... or Your Home

 

Now there's another reason to limit local government spending: to curtail municipalities' appetite not only for our money but our property.


 

Time and time again, opinion pages in the Commonwealth have called for serious spending reform. Slowing the rate of growth of government is necessary to prevent the need for future tax increases—a serious and important goal indeed.

 

Now the need for serious spending reform is more urgent than either. There’s a new beast on the horizon. A critical Supreme Court ruling now puts our property--our homes--at risk from rampaging government.

 

Your home is your castle, right? It was until June 23rd. That’s the day the Supreme Court, ruling in effect that your home is merely on loan from your friendly local government, granted broad powers for eminent domain for “economic development.”

 

New London, Conn., officials had condemned homes and businesses to make way for an office building, swanky retail shops, and luxury condos and apartments. Their argument; The development would generate more tax revenue than the existing buildings. The new buildings would generate a larger tax base, and thus more tax revenue… which, the Supreme Court ruled, constituted a “public use.”

 

So, next time your local government is strapped for cash, rather than fight a nasty tax battle it has another option: Taking your home or business for “economic development.”

 

Thanks to the Supreme Court this now means simply “raising additional tax revenues.” Soon, anyone’s house could be in jeopardy to pay for new and expanding services.

 

Particularly disturbing is that the Virginia Supreme Court has the same issue before it now, and may, out of necessity, bow to the Supreme Court decision—l eaving us all in serious jeopardy.

 

A great Virginian warned us, "Government big enough to supply everything you need is big enough to take everything you have. ... The course of history shows that as a government grows, liberty decreases." It's time we heed Thomas Jefferson’s words and take immediate action.

 

We need to rethink just how our various levels of government interact with citizens, taxpayers, and property owners. Government has "sprawled" into new areas—creating agencies and new services at every turn. Over the years a number of “vital” programs have been expanded or added to the list of “core” services provided by government.

 

I don’t want to sound cold blooded, but if it’s between my house and a new government program, I’m going to pick my house every day of the week.

 

Just look at the state’s budget. Flush with cash after a largely unneeded tax increase, the state budget has mushroomed over the last 10 years. Policy makers need to show restraint on the spending side, or the bulldozer could come to your community to “improve” the ’s tax base and give government more money to pay for increasing programs and services.

 

While every local government may not be in the same position as the Commonwealth, the General Assembly needs to act immediately and set the ground rules for appropriate eminent domain use to prevent abuse.  Strict standards need to be erected with appropriate safeguards for property owners.

 

One possible disincentive for abuse would require compensation to be based on the appraised value of the land after rezoning i.e., commercial real estate is almost always more valuable then residential. Another option would require localities to pay a premium if eminent domain is used—say 150 percent of assessed value.

 

Simultaneously, every local government should re-evaluate its structure and the services it currently provides. Every program and activity should be scrutinized for effectiveness, efficiency, and relevancy: i.e., is it a proper role for government to do this program? If we don’t demand this, if we don't significantly limit the rate of growth of our governments, eminent domain will inevitably play a larger and larger role in future economic development plans.

 

In her stinging dissent, Justice Sandra Day O’Connor validated the danger when she wrote, “The specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carleton, any home with a shopping mall, or any farm with a factory.”

 

Action is needed, now. Our homes and businesses depend on it. In this election year, our voters should demand that those they vote for support legislation to strictly limit the use of eminent domain here in the birthplace of individual freedom.

 

-- July 11, 2005

 

 

 

 

 

 

 

 

Geoffrey Segal is Director of Privatization and Government Reform Policy at the highly respected and nationally acclaimed Reason Foundation in Los Angeles. He is also the Senior Fellow for Government Reform for the Thomas Jefferson Institute for Public Policy – the leading non-

partisan public policy foundation in Virginia. 

 

You can e-mail him here.

 

Read his profile here.