Michigan Turns Foreclosure into a Government Self-Enrichment Machine – National Review

Van Buren County, Mich.Can the government take your home and all your equity in it if you fall behind on your property taxes or like many people in Flint, Mich. refuse to pay your water bill?

The state of Michigan and a handful of other states think so. These states odd tax laws allow counties to take and sell tax-delinquent properties and keep all the profits from the sale no matter how small the tax debt or how valuable the property.

After bus driver Henderson Hodgens fell behind on his 2011 property taxes for the home and farm where he grew up in Geneva Township, Van Buren County took and sold his property. He owed $5,900 in taxes, penalties, interest, and fees. He thought hed be able to pay it when he got his tax refund. But health problems left him unexpectedly unable to pay or to sell before the county foreclosed. Van Buren County sold his property in 2014 for $47,500. The county kept every penny of what was left of Hendersons inheritance. His one tangible tie to his lost property is his old, broken-down tractor. It is something that reminds me of my dad, reminds me of my property, he said. And at least they cant take this from me I dont think.

Likewise, Wayside Church, a small, struggling church located in a southern section of Chicago, lost its former youth camp in western Michigan when financial troubles left the church unable to pay on time. The church owed $16,750. Van Buren County sold it for $206,000, yielding a massive windfall for the government. The $190,000 profit that the county pocketed could have gone a long way for the impoverished church, which has a new pastor but few funds to help him realize his hopes of working with area youth or even paying utility bills.

Other counties across Michigan are also taking advantage of property owners distress. Thousands of people every year are losing valuable properties to pay much smaller tax debts. Wayne County is capitalizing on its most vulnerable populations, using the high interest rates imposed on tardy taxpayers and highly profitable sales of tax-foreclosed properties to balance its budget. And in a shocking display of injustice, the city of Flint recently threatened, under this same confiscatory tax law, to take homes from residents who refuse to pay their water bills due to the citys crisis with tainted water. Flint has backed off from this approach for now, but under state law it may still choose to act on its threats in the future.

Arizona, Massachusetts, Minnesota, North Dakota, and Oregon similarly leave distressed homeowners without any chance to claim the surplus profits from the sale of their tax-indebted properties. Minnesotas tax law may be the most curious, because the states supreme court once recognized that the right to the surplus exists independently of [any] statutory provision. In other words, it is one of the unalienable rights recognized by our Founders, which courts must protect, no matter what a statute might say.

On July 13, Hodgens and Wayside Church petitioned the Supreme Court to put an end to the injustice caused by such confiscatory tax statutes, and to hold that the takings clause requires Van Buren County to refund the windfalls it took at their expense. This case is our last hope, said Reginald Hill, a deacon at the church.

The takings clause of the Fifth Amendment provides that the government cannot take private property unless it pays just compensation. The Supreme Court has repeatedly said that the purpose of the takings clause is to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.

Fairness and justice demand that the government take only what it is owed. It is neither fair nor just for the government to swallow up life savings and livelihoods in the name of balancing government budgets. The duty of securing a healthy public fisc belongs to the public as a whole not just those who are struggling to get by. The government violates the takings clause when it forces property owners who are unable to pay their property taxes to bear more than their share of the tax burden.

Should the Supreme Court accept the appeal, it will be presented with a threshold jurisdictional issue before it can address the merits: It must make it clear that federal courts have jurisdiction to hear the takings claims in Hodgens and Wayside Churchs petition. Although this point may seem like common sense, the Sixth U.S. Circuit Court of Appeals struggled with it in this case. Thats not too surprising, though, because the Supreme Court has for a few decades made it harder for plaintiffs to enforce their Fifth Amendment property rights than other constitutional rights, by requiring takings lawsuits to start in state court, a venue that is often more deferential to state and local regulators and regulations. Even convicted felons have a better chance of a day in federal court.

Hopefully the Supreme Court will put a stop to these takings for good and will open wide the federal courthouse doors for people who are being robbed by the government. But in the meantime, Michigan and states like it would do well to do some soul searching and change course.

Christina Martin is an attorney with Pacific Legal Foundation, a national nonprofit organization that seeks to provide liberty and justice for all. She is counsel of record in Henderson Hodgenss and Wayside Churchs petition to the Supreme Court.

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Michigan Turns Foreclosure into a Government Self-Enrichment Machine - National Review

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