6/27/2005

Property Seizures Threaten PA Small Business: (Pennsylvania) Commonwealth Foundation, 6/27/05

By Grant R. Gulibon

Being a small business owner in Pennsylvania is not easy.

There's the punishing tax burden levied by state and local governments that see small firms not so much as vital cogs in the commonwealth's economic engine as cash cows to be milked to pay for more government spending.

There's the increasingly complex maze of labor, environmental and other regulations that ensnares scarce capital that could have otherwise been used to hire new workers, reward existing employees, or invest in equipment and training that improves products and services for consumers.

And finally, there's the difficulty in just finding qualified people to staff their organizations-the direct consequence of a government-run school system that fails to provide too many young Pennsylvanians with even the most rudimentary workplace skills.

But for some Pennsylvania business owners, all of the aforementioned problems are dwarfed by an even more fearsome possibility: That government and quasi-government authorities will swoop in and shut down their business by using the power of eminent domain.

Under eminent domain, the government can take privately owned property in the "public interest," as long it pays the owner what it determines to be "fair market value." The owner has little say in the matter if the action is determined to be for a "public good"-and in recent years, governments have stretched that definition to the breaking point.

In Central Pennsylvania alone, there are two recent glaring examples of this growing problem. The first is the proposed taking of Cramer Airport Parking. Stan Cramer has been in the parking business for more than two decades. He, his wife, his son and his daughter run their airport parking and car rental business near the Harrisburg International Airport (HIA) in Middletown. As one can imagine, location is everything in the airport parking business.

Now the Susquehanna Area Regional Airport Authority (SARAA), which owns HIA, is trying to take the Cramer family's 17.6 acres. HIA's aviation director says the authority needs the Cramer property in order to attract a cargo transfer or airplane maintenance facility that would lease the property from SARAA. This raises the question of whether or not the authority is doing the adding of a private business interest-but the questions don't end there.

Still unaddressed is the issue of how taking the Cramers' land would affect the parking choices available to the airport's consumers. For without the Cramer parking business, HIA, which recently built a new parking facility, would hold a monopoly on airport parking.

Saying that SARAA has not offered them fair market value and that they could not relocate their business, the Cramers plan to fight the authority in court. And they may not be alone in taking legal action. The Pennsylvania Attorney General's office is looking at the issue with an eye toward potential antitrust violations.

The Cramers' anger and frustration is not unique in the Central Pennsylvania region. Recently, the United States General Services Administration announced that it has selected three potential sites for a federal courthouse in Harrisburg. Building on one of those sites would displace half a dozen small businesses and residents who live in restored historic homes. Those property owners also plan to fight to defend their rights.

Unfortunately, the abuse of eminent domain is not just a local phenomenon. It is happening across the country-and its pace is likely to quicken in the coming years. For while eminent domain was once generally limited to the taking of private property for truly "public" uses such as roads, government bodies are increasingly using eminent domain to allow developers or other businesses to find other private uses for the property that generate more revenue for the government's coffers than the existing owners do.

This expanded definition of eminent domain was recently challenged by some Connecticut property owners. Sadly for the Cramers and others threatened with the taking of their businesses or homes, the United States Supreme Court just gave land-hungry governments nationwide the green light to bring the bulldozers through their front doors in the name of "progress."

In Kelo v. City of New London (CT), the Court decided, by a 5-4 vote, that it is constitutional for a governmental body "to take property from one private party in order to give it to another private party because the new owner might produce more profit and more taxes for the City from the land," as summarized by the Institute for Justice (IJ), a national libertarian non-profit litigation group that argued the case.

The Kelo ruling will undoubtedly make the Cramers' fight to keep their business even more difficult-and it should send a shiver down the spines of all property owners here in the mid-state. Living, let alone running a business, in Pennsylvania only continues to get harder.


Commonwealth Foundation: www.commonwealthfoundation.org
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