11/10/2006
Eminent domain relief finds success; minimum-wage initiatives pass as well
Small-business and property owners breathed a sigh of relief after election results showed 9 states voted to limit governments' power of eminent domain Tuesday.
Since the 2005 Kelo v. New London Supreme Court ruling widening governments' ability to seize private property, NFIB has worked in the courts, in Congress and the state legislatures, and at the ballot box to protect small business from government intrusion and property seizure.
"NFIB led the small-business effort in support of the initiatives to protect our members' businesses and farms from seizure for projects that supporters justified for raising a few more tax dollars or creating a few more jobs, but clearly benefited developers and large businesses," said Steve Woods, NFIB's vice president of state public policy.
On Tuesday, voters in Arizona, Florida, Georgia, Michigan, Nevada, New Hampshire, North Dakota, Oregon and South Carolina voted to prevent local governments from seizing private property and transferring it to a private developer.
California and Idaho were the only two states in which an eminent domain protection ballot measure did not pass, and the Montana state Supreme Court ruled at the last minute that a scheduled eminent-domain initiative would not appear on its state ballot. Washington state's ballot measure on protection from regulatory takings also failed.
"The eminent domain victories in nine states were huge for small business--one of the bright spots for the election," said Woods. "The three states where it lost was because the initiative included a broader provision on regulatory takings, which was vigorously opposed by local governments and environmental groups."
Also on small business' radar this election was minimum wage, as six states overwhelmingly voted to raise the starting wage above the current federal rate. Voters in Arizona, Colorado, Missouri, Montana, Nevada and Ohio passed ballot initiatives tied to the Consumer Price Index, which will dangerously cause the starting wages in these states to rise each year.
Small-business owners do their best to offer a fair, compensatory wage, but requiring every company--even those that cannot afford it--to pay a higher wage to all employees could backfire, as businesses could be forced to lay off workers or cut benefits.
"This is clearly a dangerous precedent, and one that our members strongly opposed," Woods said. "The real losers in this will be the under-skilled workers who are looking for their first job and the consumers who will pay higher prices, as the minimum-wage hike raises business costs but not productivity."
Stay tuned to NFIB.com for more information on what the midterm election results mean for you and your business.
Eminent Domain Initiatives
A summary of the results of the eminent domain ballot initiatives this election
| State | Initiative summary | Passed/Failed |
| Arizona | The use of eminent domain must be approved by the state, and property taken must for public use. (Economic development is excluded from the definition of public use.) Additionally, if a land-use law affects property values, governments must reimburse the property owner. | Passed |
| California | Would limit the government's authority to condemn private property for alternate uses, and also would require governments to reimburse property owners for "substantial economic" loss due to "government actions." | Failed |
| Florida | Except in certain situations, bars state and local governments from giving property seized by eminent domain to another private party. To allow exceptions, the state Legislature must pass a general law by a three-fifths vote. | Passed |
| Georgia | Local officials must vote to apply eminent domain, and any private property taken must be put to public use. Also, state law can limit the use of eminent domain by cities or counties. | Passed |
| Idaho | Would have restricted state from using eminent domain to transfer private property to another private entity. It would have made exceptions for blighted property. The initiative also proposed that the government pay "just compensation" to a landowner if a land-use law interfered with the ability to sell, own or divide the land. | Failed |
| Michigan | Forbids state and local governments from seizing private property and giving it to a private developer. If a principal residence is seized for public use, the government will be required to pay the property owner at least 125 percent of the property's fair market value. | Passed |
| Nevada | Defines that "public use" cannot apply when taking property from one private entity and giving it to another. Must pass a second vote, in December 2008, in order to take effect. | Passed |
| New Hampshire | Forbids private property from being taken for transfer to another private party. While property taken may be used for public use, the amendment states that public use may not include "public benefits resulting from private economic development and private commercial enterprise." | Passed |
| North Dakota | Redefines "public use" so that private property no longer can be transferred to a private developer if the public will benefit from the economic development of the property. | Passed |
| Oregon | Any public entity that condems private property may not transfer the property to another private party, unless the property in question poses a threat to public health and safety, or if it exists where transportation or utility facilities will be built. | Passed |
| South Carolina | Prohibits the state or local governments from condeming or seizing private property for any reason except for public use, and states that economic development is not considered public use. Also allows the General Assembly to pass a law that allows the government to deem a private property blighted and seize it only if it poses a danger to the community's health and safety. Fair compensation must be paid in this case as well. | Passed |
| Washington | Would have required governments pay property owners if the "use or value of private property" was affected due to regulations. | Failed |
