In an earlier post, I noted that New York's new High Line park was funded by the entire city but that most of the benefits went to local residents and landlords. I suggested that New York could create a special assessment district, such as was common for parks in the nineteenth century and is becoming increasingly common in New York today, to charge surrounding properties some of the cost of maintenance and construction.
I was excited to learn that the non-profit managers of the park, Friends of the High Line, suggested a "High Line Improvement District," with accompanying tax assessments, to help raise part of the estimated $3.5 million dollars in annual maintenance costs.
Unfortunately it appears that local residents were able to shoot down the idea.
Perhaps the inflated salary of the High Line's director, reported in this Times story, helped fan community opposition. But the main problem was that local residents already had their park, and they knew concentrated opposition always carries more political weight than a very slight tax increase spread across the whole city. Other successful improvement districts, like that around Bryant Park, were created before most of the actual improvements were done, so that payors knew that without their contribution they would not receive the public park or public good. Once the work on the High Line was substantially complete, however, most residents knew that the city would not close down, or let deteriorate, such a well-publicized project. Their opposition to the assessment district, like the construction of the park itself, carried no cost to them.
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Are there legal issues to doing such an assessment district? I believe the VA Supreme Court struck down such an entity that was dedicated to transportation funding in Hampton Roads earlier this year (or last). Can't remember the specific issues, but I believe the sticking point was between the group's accountability/governance and who was taxed.
The Hampton Roads Transportation Authority is probably the entity you're talking about, and that was a somewhat different issue than your typical special assessment case. THE HRTA was created in 2007 (in a law that also expanded the powers of the Northern Virginia Transportation Authority (NVTA)) and was allowed to fund transportation initiatives in the region with vehicle surcharges and even some local property taxes that its appointed members could design. The Virginia Supreme Court struck both authorities down 2008 because their enabling laws unconstituionally delegated taxing authority from the General Assembly to an unelected body (the non-delegation doctrine may be moot federally, but state courts are still giving it some consideration).
Most other special assessments districts in existence actually allow the affected property owners to vote on the district or particular taxes and therefore decide whether they are willing to pay for the public park or other public good. Others are merely imposed by local government, who don't delegate authority. Ideally, the districts provide the perfect synchronicity of cost and benefit, and they demonstrate local government at its most efficient. There is still the ever present issue of exactly where to draw the line. Why do owners on one side of a street have to pay for a park while those immediately across from them don't? No reason, except that lines have to be drawn and therefore they have to be drawn somewhere.
The legal arguments against special assessment districts usually hinge on the twin concepts of "necessity" and "special benefit." The local government, though its actions have a "presumption of validity," must show that the project is by "necessity" a local project, and that the charged property owners receive a "special benefit" (an increase in market value of the property) at least "proportional" to the tax. Some states judges are more sympathetic to these districts than others, but just about every state has some form of special assessment district on its books, often for sewer projects.
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