Forced Annexation
Recommendation
Reform N.C. statutes to require approval of two-thirds of the property owners in areas to be annexed.
Background
• North Carolina is one of only four states that permits municipalities to annex property without a vote of the citizens in the affected area.
• Forty-six states provide a mechanism for property owners to vote on whether they want to be annexed. South Carolina requires 75 percent of the property owners, representing at least 75 percent of the property value, to provide their consent.
Why Annexation Laws Need Reform
• Forced annexation violates principles of democracy. The American system of government is based on the principle that government must be controlled by the "consent of the governed." Forced annexation violates this principle by not allowing citizens to vote on whether or not they want to be annexed.
• There are unreasonable and unfair costs. When municipalities forcibly annex areas, homeowners are often assessed so-called development fees. These fees often cost thousands of dollars for the extension of services that residents neither need nor want.
• Municipalities simply want to expand their tax base. While supporters of the current law argue that cities need forced annexation to plan growth, the reality is that most N.C. cities that use forced annexation are motivated by the desire to expand their tax base in order to pay for inefficient service delivery or extravagant spending projects.
• Non-residents already finance municipalities. Supporters of forced annexation argue that non-residents are using services without paying for them. Although they do use city services when they work and shop in the city, non-residents also pay taxes both directly in sales taxes and indirectly in the prices they pay for purchases at businesses in the city.
• Non-resident user fees can address concerns. Even assuming that non-resident funding is insufficient, the answer is not to force non-residents into the city, but to charge appropriate non-resident user fees for city services. Obviously, forced annexation supporters do not favor this option because they want the city to have monopoly power over new residents, forcing them to pay taxes for services they neither want nor need.
• Forced annexation weakens citizen control and creates inefficiencies. By encouraging cities to expand, forced annexation weakens citizen control over city government and creates inefficient delivery of services by large city bureaucracies. Some research examples: · Columbia law professor Edward Zelinsky found that large urban governments are less responsive to citizen preferences than smaller towns and cities.
· USC professor Robert Bish and Indiana University professor Vincent Ostrom concluded that large urban governments are often less efficient in providing public services than smaller city and suburban governments.
· Harvard researcher Howard Husack found that despite the claim that cities need taxes from wealthy suburbanites to help poor inner-city residents, city spending flows to areas that have the most political influence (which are rarely the poorest neighborhoods). Raleigh's extravagant spending on its downtown and relatively low spending on poorer Southeast Raleigh seems to bear out Husack's finding.
• Forced annexation reduces the competition between municipalities. Many economists argue that a multiplicity of jurisdictions (county, city and suburban) encourages local governments to compete for residents based on efficient delivery of services that residents desire and demand. Large consolidated city governments that are created by forced annexation promote government monopoly power over residents and are less efficient and less responsive.
Analyst: Dr. Michael Sanera
Research Director and Local Government Policy Analyst
919/828.3876 • msanera-at-johnlocke.org
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