RealWorldGraduation_Question_21 <– PDF
The Mayor and City Council of a certain city desired to raise the amount of tax revenue received by the city. They made a secret arrangement with a mall developer as follows:
- The city would designate a certain district of the city, consisting of 150 homes and a few small businesses as suitable for development. This district was selected because most of the homes are more than 30 years old, and it has excellent access to major freeways.
- With the area so designated, the city would send notices to each homeowner and business owner that they had 90 days to move out of their homes, and the land turned over to the developer.
- In order to save taxpayers money, the city would offer 85% of the current appraised values of the homes and businesses as compensation. On average, the homes in the affected district are appraised at $130,000.
- The total amount paid to the homeowners by the city as compensation would be repaid by the developer. He would be allowed to collect an additional 2% surcharge sales tax on everything sold by stores in the mall. That way, the city would be repaid the amount given to the original homeowners, and also collect all the usual sales taxes.
- The Mayor, City Council, and their respective staff members were to do all of the foregoing without any public hearings or notices until the formal designation letters were mailed to each affected resident.
The Constitution of the state in which this was to occur contains a “takings” clause, in which people are to be compensated for any seizure of property devoted to public use (i.e., the same as the U. S. Constitution’s Fifth Amendment). If this plan were enacted, which of the activities contained in the secret plan would violate both Constitutions?
a) A government entity entering into a secret financial agreement with a private entity.
b) Seizing property from a group of private owners and giving it to another private owner for the benefit of the new private owner (as well as the city).
c) Arbitrary designation of a certain district for unusual treatment simply because of the age of the homes and their location.
d) Forcing each homeowner to take a $19,500 loss on their property, since they will be paid only $110,500 for homes that were appraised on average for $130,000.
e) All of the above.
Tags: fifth amendment, real world graduation, U. S. Constitution
