Friday, January 2, 2009

Protecting Non-Voting Property Owners from the Tyranny of the Majority

Today I learned that one of our Florida Keys "regulatory taking" plaintiffs is the subject of animosity from some of his fellow landowners who own homes on developed land. His "friends" believe this gentleman is trying to bankrupt Monroe County with his regulatory taking claim. I would point out that our client's "fellow landowners" are responsible for the election of our County Commission, as 70% of the owners of undeveloped Keys land are not registered to vote in Monroe County.

The drafters of the United States Constitution feared, more than anything else, the "tyranny of the majority" that can be launched by the majority of voters -- or in some instances one judge -- against a minority of voters. It was for that reason that the Bill of Rights was adopted by the first U.S. Congress and all of the States. None of the first 10 amendments to the U.S. Constitution protect the rights of government -- they are intended to protect the rights of the minority against the evil doings of the majority.

Monroe County suffers from a number of parochial failings, including the "got-miner" mentality of a majority of its voters (and their lackeys, the County Commissioners). Over the past 20 years, Keys got-miners have used the ballot box to halt the construction of homes and businesses by the non-voting minority landowners. This is wrong -- in fact, this is sick. Our clients have turned to that 1789 document, called the United States Constitution, to correct this wrong -- and their unaffected neighbors are pissed as hell. We and our clients are not trying to bankrupt the County. Even if we were, the County cannot declare bankruptcy to avoid paying Just Compensation to our clients.

Non-charter Florida counties have no bankruptcy avenue to take. Non-charter counties -- including Monroe County -- have no corporate existence; they are merely lines on a map. They cannot absolve their debts by filing for bankruptcy; in fact they cannot file for bankruptcy, period.

What can happen -- and now likely will happen -- is that Monroe County's Commissioners will be replaced by a board of accountants named by the Governor -- just as happened in Miami several years ago, and the accountant board will raise property taxes to the maximum allowed by the Florida Constitution (10 mills). That is four times the current property tax rate of about 2.5 mills.

For you got-miners who are listening, let us assume you now pay $4,000 per year in property taxes. One-half of that sum goes to the School Board, so you are only paying $2,000 to the County. The County's tax assessment runs about 2.5 mills, the lowest rate in the State of Florida, lower even than Palm Beach or Collier Counties. The Florida Constitution limits local government taxes (outside of municipalities) to 10 mills. So your County ad valorem tax could jump a factor of 4 until it hits the Constitutional maximum, or $8,000 per year. Add back the $2,000 school tax, and your tax bill has just gone from $4,000/year to $10,000/year. But just think, that vacant lot next door will never be developed, and it will only cost you $6,000/year to keep it that way. (One way or another, we are forced to pay for getting our wishes granted.)

It is unlikely that increasing all Monroe County tax bills by a factor of four will compensate all of the landowners (70% non-voting) for the regulatory taking of their land, but at that point the State of Florida will be on the hook for the difference. There will be no County bankruptcy filing under any circumstances. The developed-property owners will get nailed with several years of maximum tax bills, and the State will cough up the rest of the money. Our clients, most of whom are well into their senior years, will quietly laugh all the way to the bank (if they can find one, that is).

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