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Not At Others’ Expense - CA Prop 90
by Gary M. Galles [author, academic] 10/24/06


One of the biggest issues facing Californians in November is Proposition 90.  So, as usual, misinformation is playing an important role.  That is why Proposition 90 should be named the “Not at others’ expense” initiative, since it explains both its purpose and its opposition.

Prop. 90 would rein in abuses of eminent domain and regulatory powers by state and local governments, keeping them from imposing the costs of “doing good” on landowners whose property they covet, rather than on the citizens who benefit.

Gary M. Galles

Mr. Galles is a professor of economics at Pepperdine University. [go to Galles index]

Prop. 90 would stop the use of eminent domain and regulations for purposes unjustifiable as in the general welfare.  It would narrow eminent domain from “public purposes” (essentially, for whatever a government wants), to “public uses” (e.g., schools and roads).  It bans uses that transfer property from one private user to another.  Further, the particular public use must be specified in advance and defended to a jury, rather than a vague assertion of public interest.

Prop. 90 would limit the burdens imposed on property owners.  “Just compensation” would have to actually make property owners whole, rather than allowing government to pay far less or use the threat to extort cheaper “voluntary” sales.   “Partial” regulatory takings, which now go uncompensated unless they deprive owners of virtually all use of property (equivalent to saying a mugging isn’t robbery if you were left with money for a cab ride home), would also have to be paid for, not simply commandeered.   

Opponents have complained that Prop. 90 would hamstring protecting wildlife, providing open space, protecting the coast or farmland, etc.  But Prop. 90 would allow all of those, except to assure that they are “not at others’ expense.”  It simply makes Californians pay for their benefits, rather than “unlucky” property owners.

A similar Oregon initiative illustrates the abuse and inefficiency in the current system.  Far fewer new regulations were imposed afterward.  But that just shows that the government bodies and their voters didn’t value them enough to pay for them—they were inefficient, imposed only because they were artificially cheap to those controlling government.  Rather than admit this, though opponents claim it could cost taxpayers billions.  For that to be true, government would have to continue its current behavior, which must involve billions in theft.

The Legislative Analyst rebuts this:  “…state and local governments probably would modify their policymaking practices to try to avoid the costs of compensating owners for losses.  In some cases, government might decide not to create laws and rules because of these costs.  In other cases, government might take alternative approaches to achieving its goals.  For example, the government could *Give property owners incentives to voluntarily carry out public objectives.  *Reduce the scope of government requirements so that any property owner’s losses were not substantial. *Link the new law or rule directly to a new public health and safety (or other exempt) purpose.”  But these alternatives are exactly what a government advancing the general welfare, rather than stealing from some for others, would do.

Prop. 90’s “not at others’ expense” restrictions also explain its opponents.  They all benefit from the current system, which allows political mandates to be imposed without paying the real costs.  Government bodies throughout the state abuse the current system to get control of resources without paying for them.  Groups such as environmentalists benefit from capturing some of that “cheap” control through their political influence.  “Connected” developers benefit from governments’ use of eminent domain to assemble parcels that they otherwise could not, or to get them at an artificial discount.  Utilities avoid paying the full costs of transmission lines, and businesses reduce their electrical bills.  Banks profit from underwriting redevelopment bonds on projects made possible only by eminent domain abuses.

Proposition 90 protects Californians against government acting beyond its justifiable scope.  It simply restricts government theft.  That is hard to twist into a reason to vote no, but that hasn’t stopped opponents from trying. CRO


copyright 2006 Gary M. Galles



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