ELECTIONS : Voters to Settle Land Battle in Arizona : Proposition 300 has become rallying point for those who see government regulators as a threat to property rights. Environmentalists say it will hurt the wilderness, taxpayers.

On Election Day, the eyes of America’s environmental movement will be on Arizona. And a good chunk of its money will be there too.

In one of the nation’s fastest-growing states, voters intent on protecting their private property from government regulators are squaring off against environmental activists.

Proposition 300 would direct Arizona state agencies to analyze how any new regulation would affect the value of private property and determine whether and how much citizens should be compensated for their losses.

The outcome is expected to reverberate powerfully in Washington and in statehouses across the nation.

The proposition is one of dozens of “private property rights” measures springing up in states and gaining ground on Capitol Hill.

Once a crusade embraced only by libertarians and conservative constitutional scholars, private property rights has become the rallying cry for citizen backlash in an angry political year.

A victory in Arizona would boost the fledgling movement, as well as demonstrate how general voter unhappiness with government can be harnessed and converted to pursue a specific political goal.

Proponents of Proposition 300 argue that the measure would uphold a cherished constitutional principle: The government may not deprive citizens of private property without just compensation.

“It’s time for us to make the unaccountable government--the bureaucracy--responsible for what they do and how it affects private property and the business community,” said Linda McClure, a spokeswoman for Arizonans for Private Property Rights.

The movement is financed heavily by commercial developers, bankers and mining and timber industries, although its supporters include many small landowners who charge that they have been denied use of their property by laws and regulations intended to protect the environment, preserve historic sites and assure public health and safety.

Environmentalists warn that Proposition 300 and similar measures will cost taxpayers dearly and erode the government’s ability to protect the environment and public health and safety.

It is “the single most important environmental referendum on the ballot this year,” said Daniel J. Weiss, political director of the Sierra Club.

Betsy Loyless, political director for the League of Conservation Voters, an advocacy group, said the measure is “a boondoggle and a scam” on Arizona voters. “This proposition will allow polluters to tell their communities, ‘If you don’t like what I want to do on my property, then pay me not to pollute, pay me not to locate here.’ ”

Property-rights advocates have focused on two categories of national and state laws--those preserving wetlands and those protecting the habitat of plants and animals considered in danger of extinction.

Largely without providing compensation to landowners, the federal Endangered Species Act and the Clean Water Act--under which federal wetlands policy is administered--have blocked activities ranging from logging to the construction of shopping malls and subdivisions on privately owned lands.

With less than a week to go, each side has taken to Arizona’s airwaves with a vengeance. Polls sponsored last week by proponents showed the measure leading slightly, but nearly half of Arizona voters were still undecided.

The issue arises at a time when the environmental movement has suffered a series of legislative defeats on Capitol Hill.

Many activists have concluded that the best chance of strengthening environmental protection now is through regulation--a tortuous process by which federal agencies, not Congress, adopt new rules.

Even that strategy could be thwarted if the private-property-rights movement begins racking up victories in Washington.

House and Senate lawmakers already have proposed legislation that would go well beyond Arizona’s proposition by requiring compensation for any federal regulation that would devalue a piece of land by 50%.

“When the new Congress arrives, we’re going to find a much more friendly audience,” predicted Rep. W.J. (Billy) Tauzin (D-La.), one of the House’s most fiery advocates of such measures. “The momentum is growing.”

Both sides describe Proposition 300 as a fight between David and Goliath--and each side claims to be the little guy.

Last week, with both sides reporting their financial assets, backers of Proposition 300 had twice as much money on hand as those opposing the measure.

In all, Arizonans for Private Property Rights has raised $598,000 and attracted the attention of at least one national organization, the National Assn. of Realtors, which has contributed $50,000.

The Arizona Community Protection Committee, which is organizing the campaign against Proposition 300, reported Oct. 27 that it had raised $240,000.

Campaign treasurer Sandy Bahr said the total included $100,000 raised by the Arizona chapter of the Sierra Club, $5,000 from the Sierra Club’s national political action committee, and a $5,000 contribution from the Wilderness Society.

Late last week the League of Conservation Voters’ political action committee dispatched $62,500 for the fight.