Imminently concerned: A local view of eminent domain

Blue Grass Institute for Public Policy Solutions
JIm Waters

Introduction

Eminent domain is becoming an abusive power that should be restrained to perpetuate a civil society founded on voluntary exchange.

Our nation’s founding fathers believed not only in limiting the taking of private property for “public use,” but also in the vigorous protection of private-property rights, which they considered sacred. John Adams said: “The moment the idea is admitted into society that property is not as sacred as the law of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”

A firm belief in the sacredness of property rights makes our society different than virtually all others. Frederick Bastiat wrote: “Life, liberty and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”

Put another way, that inimitable philosopher Frank Zappa said: “Communism doesn’t work because people like to own stuff.”

Stealing Most of us learned in kindergarten that taking something belonging to one person and giving it to another is stealing. In civil dealings, when a buyer demands something that a seller won’t give up, it’s the same thing – stealing. And just because he throws down $5 as he’s running out the door doesn’t mean that it’s not stealing.

The Supreme Court’s recent Kelo v. New London decision indicates a growing disrespect for – and lack of knowledge concerning – private-property rights, especially at the state and local levels of government.

Too many local government officials’ economic-development policies consist of plans to eliminate successful businesses to make room for other companies they hope will succeed. Not only does such a scheme bear little resemblance to any kind of reasonableness, it’s also actually the same approach used in the planned economies of the now-defunct Soviet system.

Eminent-domain abuse often occurs when government decides it wants someone else’s property without paying for it. It ends up acting as a form of real-estate agent for people who want to buy what others don’t want to sell. Actually, a more accurate description would be: When you buy something that somebody wants to sell, you go to a Realtor; when you buy something somebody doesn’t want to sell, you go to government.

The founders were so concerned about such coercion when it came to the taking of property that they placed strict limitations on the use of eminent domain in the Constitution. They said private property could only be taken for public use – and then with “just compensation.”

“Just compensation” does not consist of a local government’s cursory analysis followed by the oft-repeated conclusion: “After all we can only pay fair-market value.” Our Constitution does not state “fair-market value.” It specifies “just compensation.”

Ultimately, the debate centers on what constitutes “just compensation.” Ordinarily, this should be an easy debate to win – or at least it should be in America. Owners determine the value – and the amount of just compensation – of their properties. The market price is the intersection of what a buyer is willing to pay and the owner is willing to take. Our Constitution guarantees that government purchases must adhere to that same formula.

Saving taxpayers’ dollars … after the fact

It’s almost humorous to hear local politicians talk – usually with dripping insincerity – about how they are limited in what they can pay because they want to protect taxpayers. Puhlllleeezzzeee…

If they are genuine in their desire to protect taxpayers, they should reject most of the projects for which they want to use eminent domain in the first place! Such ventures are usually unnecessary and ultimately wasteful of taxpayers’ monies.

Talking about saving taxpayers money by paying a private-property owner less than the value of their property amounts to after-the-fact nonsense for which no possible justification exists.

It is troublesome to hear policymakers oppose attempts to broaden a local government’s use of eminent domain because “they just don’t want to tie government’s hands.” Such proclamations convey a lack of understanding of our Constitution’s intent to restrain government and protect our property rights. When the ties that bind government’s grasp are loosened, that is when taxpayers must hold on to their wallets, homes and businesses with both hands.

Too many local policymakers don’t seem to have a clue about the importance of private-property rights. Too often they applaud decisions in light of the economic benefits of development projects that are firmly promised – but rarely fulfilled.

Susette Kelo did not want to give up her home in New London, Connecticut, but her local elected officials demanded she abandon her property so they could build a parking lot adjacent to a new Pfizer research facility. If this isn’t equivalent to public theft, what does it take to commit thievery? Worse, the Supreme Court upheld such pilfering.

Of course, the silver lining around this dark cloud is the blatant outlandishness of the decision. The ruling itself has scraped back the thin veneer on government’s so-called “benevolence.” What lies underneath is anything but generous.

The threat

Few eminent-domain proceedings actually move to the final stages in Kentucky. Yet the threat of eminent domain by local bureaucrats who salivate at the prospect of using government’s iron fist – no matter the issue – presents a real danger to property owners.

Just the threat of condemnation can tie up a piece of property and reduce the incentive for its owner to invest in – and improve – it. Moreover, potential buyers evaporate when the cloud of eminent domain hangs over a property.

Traditionally, purveyors of eminent domain have limited its use to those types of projects that are clearly designed for public use – right-of-ways, interstates and bridges. But in recent years, our judicial system has opened the door for state and local governments to argue the possibility of a property yielding increased “tax revenue” as a justification for public condemn of private properties.

An addiction

The prospects of increased tax revenues seduce too many local governments. Like drug addicts, policymakers often end up willing to do almost anything to satisfy their addiction to spending other people’s money.

Local governments in Kentucky increasingly act like drug addicts who will do almost anything to satisfy their addiction to spending other peoples’ money. What started out as an occasional hit is now an addiction to using government’s iron fist at will for a nebulously defined “public use.”

In her blistering Kelo dissent, Supreme Court Justice Sandra Day O’Connor warned that: “The specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”

In Kentucky

A misconception exists here in Kentucky that private-property owners have more protection because state law limits the taking of private property to the traditional uses of eminent domain and blighted properties.

Because “blighted” has come to mean everything, it now means nothing to an increasing number of elected officials. Incidents of eminent-domain use in the state in recent years reinforce the fact that local policymakers are willing to overuse eminent domain – particularly to satisfy profit-seeking developers.

Perhaps that quote by Frank Zappa was more appropriate than one might initially think. The Kelo case demonstrates that local governments can be just as tyrannical as centralized ones. Communism’s founder Karl Marx insisted: “From each according to his abilities, to each according to his needs.” In the twisted logic of today’s jurisprudence, perceived general economic needs are considered justification for subjugating individual property owners’ rights.

Unless our state policymakers proactively clarify and restrict the use of the term “blighted,” teams of local politicians and developers appear coiled and ready to use – and abuse – the Kelo Supreme Court ruling for their mutual benefits.

Conclusion

In light of the Kelo decision, some questions for Kentucky policymakers seem appropriate:

• If a development project you plan holds such great promise, why shouldn’t you pay property owners their asking price?

• If paying this “market price” is too steep, shouldn’t you reconsider the economic viability of a particular project?

• Isn’t the question of misappropriating property from citizens really about your inability to decide which programs should be funded and which ones should not?

• Whose home is safe? Whose church is safe? Whose business is safe?

• Whose interests are best served by expanding the use of eminent domain?

Legislators should keep in mind that the communities most affected by eminent-domain abuse are often those least capable of successfully fighting it. It’s the poor and disenfranchised who live in areas most affected by Kelo’s new definition of “public use.”

• Is it a proper role of government to engineer today’s society just so it can extract more and more tax receipts?

Posted by Coalition Webbies at November 30, 2005 10:33 AM