Underfunded Right of Way Budgets

When the compensation paid for the taking of private property does not include all compensable impacts of the taking, the just compensation obligation fails in its function as a check on government’s taking of private property. The underlying principle of the takings clause is that public burdens should be borne by the public and not by individual property owners. Therefore, it is critical that this calculus include the full magnitude of the burden to be imposed on the property owner as a result of the taking.

Too often, however, it does not. The proponents of public projects have an incentive to understate the property acquisition costs associated with a project to facilitate its approval. It is particularly easy to understate or omit damages to property that is not acquired but will suffer a negative impact from the project. When the true cost of the acquisition is revealed through the judicial process, usually years later, these same proponents blame the property owners, the attorneys representing them, or juries for the cost overruns. In fact, these overruns are the direct and natural result of their own conduct in failing to assess the compensation question fully. Because of the length of time between when projects are budgeted and when the final compensation is determined, the proponents of these low-balled projects generally escape accountability.

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