An Expensive Proposition

Introduction

Proposition 90, California’s eminent-domain and takings initiative, could cost taxpayers billions of dollars a year, the state’s former legislative analyst says in a new report commissioned by the Coalition To Protect California, a group that was formed in June to oppose the proposition.

“Proposition 90 would affect the cost of government activities in a wide range of important policy areas,” the 73-page report, co-authored by William Hamm, California’s nonpartisan legislative analyst from 1977 to 1986, concludes. “Assuming that California governments continue to acquire land and regulate as they have in the past, the costs imposed on taxpayers by Proposition 90 would amount to billions of dollars annually.”

Hamm and co-author Bret Dickey work for LECG, a consulting firm in Emeryville, California, with 36 offices around the world. Hamm and Dickey say that there are two main reasons for the initiative’s potentially huge price tag.

First, they write, the measure would require state and local governments to compensate property owners for laws or regulations — other than those affecting health or safety — that could diminish property values. Efforts to safeguard the environment, protect workers and consumers, or control inappropriate development, they say, could lead to substantial payouts.

Second, they write, the initiative would “significantly increase the amount that government and state-regulated, investor-owned utilities are required to pay owners when their property is acquired through eminent domain for public uses such as roads, schools, hospitals, airports, utility transmission lines, and power plants.” In some cases, they argue, landowners could even get more than the fair market value of their property.