Page 971 – Show-Me Institute

Law Enforcement Shouldn’t Profit from Forfeiture

Posted on November 10, 2005May 5, 2026 by Timothy B. Lee

Did you know that in many states, if government officials suspect your home, business, car, or other property was used in the commission of a crime, police officers can seize it without proving you guilty or even filing charges against you? It’s true. As journalist Randall Fitzgerald documented in his 2003 book Mugged by the State, it happens all across the country. Even worse, many states allow police departments to auction off the seized property and keep the proceeds. That creates an obvious conflict of interest: the more property they seize, the more money they have to spend.

Here’s the good news: Missouri’s asset forfeiture laws avoid that conflict of interest by prohibiting law enforcement officials from keeping forfeiture profits. Instead, the money is dedicated to a public education fund. And under Missouri law, seized property cannot be auctioned off until its owner has been convicted of a crime.

But some law enforcement officials don’t like those sensible safeguards for property rights. For example, at an October 27 meeting with Governor Blunt in Kansas City, Platte County Prosecutor Eric Zahnd called Missouri’s asset forfeiture system “broken.” He lamented that because law enforcement agencies don’t get a share of the loot, they have little reason to seize assets from the drug trade, leading to “very, very few forfeitures.”

It’s easy to sympathize with officials like Zahnd. He points out that police departments and prosecutors’ offices face tight budgets and competing demands on their limited resources. It’s easy to see why they’d seek additional revenue sources to help pay for their crime-fighting efforts.

But in a free society, citizens’ rights have to come first. To see what could happen if the state’s asset forfeiture laws were loosened, we need only look to other states that lack the safeguards present in Missouri’s law. Take the case of Cheryl Sanders, whose story Fitzgerald tells in Mugged by the State. The California resident was driving through Louisiana in 1995 when police officers in the town of Sulphur asked to search her car, which she had purchased used six months earlier. Under a false bottom in her trunk, police officers discovered a compartment capable of carrying drugs. Despite the fact that the compartment was empty, no drugs were found in the car, and she had no criminal record, they hauled her down to the police station for a search. Finding no drugs on her person, the police let her go. But they kept the car on “suspicion of involvement with drugs.”

It took her seven months in court to get it back. And it was a hollow victory. The legal battle cost so much that she had to sell the car to pay her lawyer.

Sanders might be forgiven for wondering if the police officers who seized her car might have had an ulterior motive. Under Louisiana law, the Sulphur police department would have received 60 percent of the revenue from selling Sanders’s car. In the previous five years the Sulphur police department, which served 20,000 people, had taken about $5 million in property using asset forfeiture laws.

Fitzgerald documents equally troubling examples in Washington state, Arkansas, Alabama, and Texas. Law enforcement officials seized cash, vehicles, homes, and businesses without convicting their owners of any crime. In some cases, the property was recovered, but only after months in court and tens of thousands of dollars in legal fees.

Of course, the vast majority of public officials, in Missouri as in other states, are honest individuals dedicated to public safety. But when it comes to protecting our rights, it’s better to be safe than sorry. The Missouri legislature, recognizing the importance of property rights, enacted legislation in 2001 to ensure that all profits from asset forfeitures would be spent on education. It’s a good rule, and legislators in Jefferson City should resist calls to revisit it. There’s nothing “broken” about a system that provides strong protections for private property.

Timothy B. Lee is an editor at the Show-Me Institute.

Eminent Domain Destroys Affordable Housing

Posted on October 26, 2005May 5, 2026 by Timothy B. Lee

On October 6, the St. Louis Post-Dispatch criticized two attempted eminent domain seizures in the suburban communities ofSt. Charles and Sunset Hills. The editorial board wrote movingly about the injustice of booting middle-class families out of their homes to make room for a shopping mall or luxury condo simply because it will bring in more tax revenue. But the Post-Dispatch insisted that eminent domain is needed for “clearing crime-ridden slums for replacement with better housing.” They cite the McRee Town redevelopment as an example of how eminent domain can be used for good.

It’s true that McRee Town was a neighborhood in distress. Some buildings had problems so serious that condemnation and demolition was the only option. But the use of eminent domain to seize and demolish entire city blocks was unfair, unnecessary, and wasteful. It destroyed badly needed affordable housing and uprooted dozens of poor people, most of whom were forced to start over in another bad neighborhood.

A better renovation plan for McRee Town would have focused on helping those already living and working in the neighborhood by expanding the stock of affordable housing. That’s what a housing ministry called Neighborhood Enterprises (NE) has been doing for a quarter century. NE managed 23 buildings in the McRee Town area demolished by the city. The story illustrates what’s wrong with “blight” condemnations, and suggests that state policymakers should be very reluctant to give city governments the power to condemn entire neighborhoods.

The properties renovated and managed by NE were nothing fancy, but they consistently passed city inspections and they provided decent, low-rent housing to people struggling to make ends meet. According to NE president Jim Roos, many other buildings in the demolition area needed repairs, but were structurally sound and could have been easily renovated. Instead, the city “clear cut” the old housing and replaced it with town homes starting at $130,000 and single-family homes starting at $180,000. That was simply out of reach for Roos’s McRee Town tenants, who paid $275 to $550 per month in rent.

It didn’t have to happen that way. For five years, Jim Roos, the president of Neighborhood Enterprises, pleaded with the Garden District Commission to employ a selective re-development plan that demolished the worst buildings but saved those that were structurally sound. Roos argued that he could help the city expand the stock of affordable housing at minimal cost to taxpayers.

Instead, Roos says, he and other property owners were ignored and excluded from the planning process. The GDC pressed ahead with their vision of the new McRee Town—a vision without much room for low-income residents. Because the Commission had sweeping eminent domain authority, there was nothing property owners and residents could do to stop the plan. When NE refused to sell their buildings, the GDC used the power of eminent domain to seize the property, relocate the tenants, and demolish their homes. Because the compensation NE received was about half of what they would need to acquire comparable property anywhere in the city, they have been forced to cut back on the number of units they offer to low-income residents. And no new affordable housing was built in the McRee Town neighborhood.

“Clearing” slums is easy. But it doesn’t solve the problems of the people who inhabit them. Affordable housing is scarce, and it gets scarcer every time more of it is condemned by the city. Instead of taking a bulldozer to distressed neighborhoods, we should find ways of rebuilding them in a way that gives a leg up to their current residents. But sadly, city officials seemed more interested in attending ribbon-cutting ceremonies for grandiose re-development plans than meeting the needs of actual residents. And because they have sweeping eminent domain powers, they had little reason to pay attention to the concerns of existing property owners or residents.

It’s certainly troubling when a city government seizes a middle-class person’s home in the suburbs to build a shopping center simply because the shopping center will generate more tax revenue. But how is it any better to demolish the homes of poor people in the city to build homes for middle-class people? Low-income Missourians, most of whom are already struggling to find safe, affordable housing, deserve better.

Timothy B. Lee is an editor at the Show-Me Institute.

Tax Hike is Unfair to Smokers

Posted on October 4, 2005May 5, 2026 by Timothy B. Lee

A group calling itself the Coalition for a Healthy Future has a suggestion to help the poor pay for medical care: raise their taxes.

Well, that’s not how the Coalition describes their plan. The group wants to more than quintuple Missouri’s cigarette excise tax, to 97 cents a pack, and use the proceeds to help finance Medicaid, the government health care program for the poor. The proposal, which the group hopes to put on the November 2006 ballot, is bad policy. It’s regressive, and it’s unfair to smokers. Voters should reject it, just as they rejected a similar tax hike in 2002.

Excise taxes are inherently regressive because the poor spend a larger share of their incomes on consumer goods. But cigarette taxes fall especially hard on poor Americans. According to a 2002 Centers for Disease Control survey, 33 percent of adults with incomes below the poverty line smoked, compared with only 22 percent of other adults. The Committee for a Healthy Future’s plan would raise taxes the most on precisely the people they’re trying to help.

But don’t smokers impose higher costs on society? Advocates of higher cigarette taxes point out that the health problems associated with smoking are treated at state expense by Medicaid. It’s only fair, they reason, that smokers pay for those higher costs through higher taxes.

It’s a good argument. The only problem is that it isn’t true. It’s true that treating smoking-related illnesses costs money. But that ignores the tragic reality that smokers die younger than non-smokers. As a result, they impose fewer costs on the retirement system. It’s hardly fair to demand that smokers pay for the costs of smoking-related illnesses while ignoring the benefits they never live to collect.

But in fact, the value of benefits not received by smokers is substantial. According to a 1998 study by Jane Gravelle of the Congressional Research Service, after accounting for the lower costs of smokers’ retirement benefits, state governments nationwide saved about $2.1 billion each year due to smoking. And that’s before considering the added revenue from excise taxes. The federal government saves even more as a result of smoking—$29 billion annually, according to Gravelle’s calculation.

Obviously, smoker deaths are nothing to celebrate. But the point is that smokers are already paying more than their fair share for the services they receive. They don’t owe the rest of us anything.

It’s no secret that the real goal of cigarette tax hikes isn’t to shore up Medicaid or compensate for the health costs of smoking, but to encourage smokers to quit. Mayor Michael Bloomberg, who signed a bill giving New York City among the nation’s highest cigarette taxes, has said as much. When signing the 2002 legislation, he stated that his purpose was not to raise revenue, but to “save peoples’ lives.” If it were up to him, he said, he would “raise the cigarette tax so high the revenues from it would go to zero.”

The American Heart Association, a member of the Coalition for a Healthy Future, agrees. “We, in the public health community, already know the value of increasing state tobacco taxes, particularly in terms of saving lives,” said Katherine Krause, executive vice president of Advocacy.

Saving lives is a worthy goal, but it shouldn’t come at the price of personal freedom. Fortunately, average Missourians understand that, however much non-smokers might disapprove of the habit, it’s not right to try to force others to change their behavior. Voters rejected a 2002 proposal that would have raised taxes by 55 cents per pack. If the new proposal makes it onto the ballot next year, voters should reject it too, making it clear that in a free society, people have a right to smoke if they choose to. State government shouldn’t be using tax policy to manipulate smokers into changing their behavior.

Timothy B. Lee is an editor at the Show-Me Institute.

Bauer Recall Shows Demand for Eminent Domain Reform

Posted on September 23, 2005May 5, 2026 by Timothy B. Lee

Tuesday’s recall of St. Louis Alderman Thomas Bauer puts all Missouri public officials on notice: voters won’t put up with politicians who abuse the power of eminent domain for the benefit of well-connected private developers. Voters in the 24th Ward were outraged after Bauer attempted to seize several homes and businesses at the corner of Manchester and McCausland in order to make room for a QuikTrip gas station.

It’s inspiring to see ordinary Missourians standing up for their rights in the political process, but the fact that the effort got as far as it did only highlights how the courts have been shirking their duty to protect private property. With Tuesday’s victory under their belts, Missouri property owners should keep up the pressure on elected officials to reform the state’s eminent domain system. Homeowners shouldn’t be forced to take the drastic step of recalling their elected officials just to keep their homes.

Eminent domain, the power of government officials to seize private property, is supposed to be used for public infrastructure like roads and courthouses. The United States Constitution says that property may only be taken “for public use,” and only with “just compensation.” But over the years, that power has been abused by local officials who define “public use” in increasingly questionable ways.

The issue reached the Supreme Court this summer in the case of Kelo v. New London. The city of New London, Connecticut, sought to condemn more than 100 private homes and businesses to make room for new research facility being planned by drug maker Pfizer. The only “public use” the city could cite was “economic development”—in essence, that the new owners would pay higher property taxes than the old ones.

The court ruled for the city in a bitterly divided 5-4 decision. In an eloquent dissent, Justice Sandra Day O’Connor charged that as a result of the decision, “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” Bauer’s QuikTrip boondoggle demonstrates the truth of O’Connor’s warning. He claims that the project qualifies as a “public use” because QuikTrip has promised to pay for a new right-turn lane at the intersection. But it’s not clear why it’s necessary to condemn several homes and businesses just to make room for a turn lane. And if chipping in some money for public infrastructure transforms any private development into a public use, then none of our homes or businesses are safe.

Fortunately for Missourians, help may be on the way. The Kelo decision focused on the protections available under the United States Constitution, but individual states are free to enact stronger protections for property rights at the state level. Governor Blunt has created a Task Force on Eminent Domain, which will make recommendations in December on how to reform Missouri’s eminent domain system.

It’s great that voters responded when one elected official stepped over the line, but the fact that the recall was necessary shows the inadequacy of Missouri’s legal protections for private property. Missouri’s eminent domain system needs to be fixed so that homeowners can once again be sure that their rights will be upheld in court. Our laws shouldn’t allow politicians like Thomas Bauer to play political games with their constituents’ homes and businesses.

Timothy B. Lee is an editor at the Show-Me Institute.

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