Judge orders new cost estimate for eminent domain ballot initiative

JEFFERSON CITY, Mo. -- A judge has ordered the state auditor to draft a new financial estimate for a ballot proposal that would restrict the use of eminent domain and require governments to compensate people for rules that lower their property values.

State Auditor Claire McCaskill's office said Tuesday it would try to come up with a revised financial projection as soon as possible for the proposed constitutional amendment.

A group called Missourians in Charge already has spent $295,000 to hire petition signature gathers in its attempt to qualify the measure for the November ballot.

The proposal generally would prohibit the use of eminent domain to transfer private property to another private owner. But it contains several exceptions, including properties used for drug dealing or that are nuisances, or land needed for use by utility companies.

The proposed amendment also would allow property owners to seek compensation if any land-use regulation enacted after Oct. 7, 2006, results in a reduction of the fair market value of their properties. Laws and rules to protect the public's health and safety would be excluded from that provision.

Representatives of the Missouri Municipal League, the St. Louis Development Corp. and the Tax Increment Finance Commission of Kansas City challenged the ballot language in a March 24 lawsuit.

Judge Byron Kinder on Monday upheld the ballot summary prepared by the secretary of state's office. But he ruled that the auditor's financial impact statement, a summary of which also appears on the ballot, was "insufficient and unfair" and must be revised.

The summary of the original financial estimate states: "The total fiscal impact to state government is unknown, but estimated to exceed $100,000. The fiscal impact to local government is unknown."

The lawsuit noted that only one of the six local governmental entities surveyed about the financial impact responded to the auditor's office.

The lawsuit claimed the ballot measure "would impose significant and quantifiable costs on local governmental entities" -- both because of the eminent domain restrictions and the new obligation to compensate property owners for zoning and land-use regulations.

Joe Martin, McCaskill's director of administration, said the office would again try to get cost estimates from the five governments that didn't respond and would send surveys to additional governments.

"He's asked us to re-evaluate the proposal and see if we can come up with a better estimate of the cost or savings, if any, to local government," Martin said. "We're going to try to complete our analysis as soon as possible."

The ballot initiative is a response to a U.S. Supreme Court ruling last summer that upheld the use of eminent domain to transfer property from one private owner to another who could generate more tax revenues by redeveloping it.

The Missouri House last week also passed legislation intended to prohibit the use of eminent domain solely for economic development proposes. That measure is now pending in the Senate.