The Supreme Court’s Decision on Taking Property for Public Use

September 25, 2005 – College of Charleston professor and Director of the Joseph P. Riley, Jr. Institute for Urban Affairs and Policy Studies, Andy Felts, spoke to the Rotary about the recent Supreme Court decision of Kelo versus the City of New London, Connecticut. In this case, private waterfront property was taken by the city for the greater public use, i.e. the ability to generate greater tax revenue. While this case seems on the surface to be rather shocking to many people, Felts told straight out that he did not think it was a “big deal” as there is considerable precedence to support it and the court loves to uphold precedence. The key sentence in the decision states that “without exception the public good has been broadly defined”, with deference being given to legislative judgment.

In 1984 the Hawaii Housing Authority v. Midkiff, and in 1954 Berman v. Parker, the court held that taking of property for economic development qualified as a valid public use under both the Federal and the State Constitutions.

A more complex issue according to Felts is the partial taking of resources. He noted that both the State and Federal governments have mandated legislation which costs local communities thousands of dollars to comply with new regulations yet have given the locals no funds with which to do it. Many communities, like New London, have declining tax revenues and no means to fund the mandates, thus new creative avenues have had to be found.

The key solution, according to Felts rests with the state legislature to fix the problems. He anticipates that the South Carolina legislature will soon prohibit the use of property tax for the schools, to be replaced with an additional 2.5% sales tax [property tax would still continue for other local services such as trash removal, libraries, etc.] The problem with this “solution” is what the communities can do if the economy fails.

Traditionally, the state has made it very difficult for cities to annex ground, the reason being that the legislature is primarily rural oriented. The tough stance that exists is meant to stifle the growth of the cities.

In the question period members raised the issue of the recent receipt of tax bills in Charleston which have caused taxes to double and triple in some cases. A series of “speeches” rather than questions quickly showed that the Rotary members gathered were as puzzled and frustrated over the whole issue of taxation as is any other gathering.

Submitted by Fred Sales, Keyway Committee