by Stanley M. Sapiro, Contributing Editor
Last week, we discussed current Congressional committee hearings on the extent of the proposed infrastructure and payments to be made by the Federal government for local streets, rapid transit, bridges and other pork barrel projects.
We mentioned that Clinton wants to spend $175 billion over a 5 year period, but the all-powerful prince of pork, Committee Chairman Ed Shuster, demands a budget breaker of $200 billion.
California provides a perfect example of the effects of this interstate infrastructure pork. Interstate Highway 5 was built to split the 100,000 acres of the Irvine Ranch and the over 30,000 acres of the Mission Viejo Ranch. The value of those ranches skyrocketed. They didn't have to pay any corresponding increase in property taxes due to this windfall because most of this land was what is called "Agricultural Preserve." "Agricultural Preserve" involves a special statutory tax exemption. Under this law, the land speculator enters into a contract with the County so that when land is only used for "agricultural purposes," it will only be taxed according to its use for farming. Included in "agricultural purposes" is holding land vacant (in anticipation of forthcoming price escalation), petroleum production, and, incidentally, food farming. Donald Bren, president of the Irvine Ranch, a multi-billionaire, is now one of the richest men in the country because of this arrangement.
Interstate 5, which goes northwards through Orange and Los Angeles counties, made many more billions for speculators-including Los Angeles' mayor Richard Riordan, who made his fortune on downtown Los Angeles land speculation. It travels the San Fernando Valley, producing many billions more in unearned windfalls. Then it splits the huge Newhall Ranch which owned 1,590,000 acres in California, according to a 1971 report by Ralph Nader's Study Group Report on Land Use in California.
Then Highway 5 goes through the Tejon Ranch, which is half-owned by the Chandler family, which owns and publishes the powerful Los Angeles Times. According to the Nader report, the Tejon Ranch owned 348,000 acres in this State. Highway 5 also benefits the holdings of what was the Kern County Land Company, now Tennaco, Inc., which owned 362,000 acres in California, a large part of which was also in "Agricultural Preserve." Besides Tenneco, other big oil companies found their properties greatly increased in value by Highway 5, particularly Standard Oil of California and Occidental Petroleum Corp. Land near Highway 5 exits that went for $350 an acre, before Highway 5 was improvised, went for $100,000 an acre once that highway was built.
And so it is that publically created value is siphoned into private pockets. Whenever and wherever Federal money is used to subsidize local infrastructure, legalized theft has been committed by Congress, with the loot of unearned windfalls from land value escalations channeled to speculators.
Way back in 1959, when Congress enacted a one-cent gasoline tax increase, a Congressional inquiry was launched into the high cost of interstate road building, at which time it was discovered that politicians in high places somehow wound up in possession of land about to be benefitted by Federal highway construction. Congressman Harrison of Virginia charged, "Before the nation gets its superhighways network, Teapot Dome may look like a child's game of marbles. Congressman Bailey from the neighboring state of West Virginia assserted: "We have turned the management of this program over to a bunch of statehouse politicians and fat cat real estate dealers in every state."
Every American who takes the Pledge of Allegiance should ask himself, does he really believe in the concluding words, "justice for all." If he does he should phone, write, Fax or E-Mail his representatives to oppose this nationwide highway robbery.
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