A state ballot initiative aims to stop government efforts to take private property to generate tax revenue, but opponents say this would lead to expensive court claims if passed in November.
Proposition 207 would require fair compensation for property owners if state or local government seizes their land for its own use. The government would also reimburse owners when its actions decrease private property values.
The goal is to discourage efforts to take private property for economic development, said Lori Klein, executive director of the Arizona Home Owners Protection Effort, the initiative's main supporter.
"Government should not be in the private economic development business," Klein said. "That is the realm of the private sector."
The initiative, which will be put to voters Nov. 7, would let owners file a court claim if they think they haven't received just compensation, or governments can grant waivers from ordinances owners feel reduce property values.
Mary Ann Miller, president and CEO of the Tempe Chamber of Commerce said letting owners file court claims for reimbursement when property values fall would lead to governments spending money to settle claims.
"One could conceivably argue that if ASU puts up a dorm right next to your property, the value of your property has been diminished," Miller said.
These payouts would take money from general municipal funds, which finance city services, Miller said.
Klein said these claims wouldn't drain city funds because most local governments can use dedicated money for planning and development to settle claims.
Tempe spokeswoman Nikki Ripley said the city couldn't take an official position on a state ballot initiative.
But the measure could drain state funds, said Ken Strobeck, executive director of the League of Arizona Cities and Towns.
Proposition 101, passed in 2004, specifies that a ballot measure must identify a funding source if it requires the state to spend money, Strobeck said.
The league has challenged Proposition 207 on these grounds, and is appealing a Maricopa County Superior Court decision to leave the measure on the ballot to the Arizona Supreme Court, Strobeck said.
Klein said the initiative wouldn't require the state to spend money because city and county governments handle most local land use and zoning decisions.
Proposition 207 would still allow the government to acquire private property for public uses, such as when property is abandoned or threatens public health and safety.
The U.S. Supreme Court decision in last year's Kelo v. New London case created a need for states to tighten requirements for eminent domain usage, said Farrell Quinlan, vice president of policy development and communications for the Arizona Chamber of Commerce & Industry.
"It flies in the face of the Fifth Amendment to the U.S. Constitution that any such takings are wrong without just compensation," Quinlan said.
The Supreme Court found that the city of New London, Conn., could take private properties for economic redevelopment and such an action could be considered a public use.
Supporters also pushed for Proposition 207 after Gov. Janet Napolitano vetoed a similar bill during this year's legislative session, Quinlan said.
Although dealing with the court claims might burden local governments, courts had to protect property owners from the "seemingly unlimited power of the government," Quinlan said.
Strobeck said the initiative would open governments up to claims on decisions ranging from density changes to allowing off-street parking in neighborhoods.
"I think it will have a chilling effect," Strobeck said.
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