Annexation has been a subject of controversy and contention in North Carolina for many years — most especially with regard to the issue of what is called “forced annexation.”
For nearly a half-century, North Carolina was one of only three other states left in the entire nation which gave cities the power to annex desirable property outside their borders — and tax its residents — without their consent. Forced annexation went essentially unchanged in North Carolina since 1959. Until this year, with the passage into law of House Bill 925.
Prior to 1959, it was the responsibility of the North Carolina General Assembly to set and extend a city’s boundaries. In 1959, the General Assembly adopted the “Annexation Act,” delegating to city governments the authority to annex areas lying near an existing municipality. The law allowed annexation by voluntary or involuntary (“forced”) means.
If a city saw financial benefit, it could move forward unilaterally on an annexation action — effecting the annexation by majority vote of a City Council. If an outlying area saw a benefit to being annexed into a nearby city, its residents could petition the city for inclusion within the city’s boundaries. City property owners pay both city and county taxes, and ostensibly receive the same level of municipal services, like water, trash removal and sewer service (although this is not always the case.)
According to the old way of doing things, a city could also forcibly annex an outlying area if it met certain specified criteria of population, density and commercial development. The area would also have to physically border the city (but some exceptions were often made for “non-contiguous” areas called a “satellite annexation.”) The involuntary method of annexation did not allow a vote of the people of the targeted area. As long as the outlying area met the criteria specified in the law, the city could proceed through a required sequence of actions.
Whether annexation was voluntary or involuntary, the annexing city had to provide a plan and schedule for providing basic city services to the new citizens — although the city was given a grace period of several years to actually provide those services. However, immediately upon annexation, the new citizens would be subject to city taxes, zoning laws and other regulatory controls. And here is where the controversy regarding forced annexation comes into play.
- A city was allowed by state law to annex developed areas without the consent of those people targeted for annexation.
- Those new citizens immediately fell under the laws, taxes and land-use controls of the city, subjecting them to double-taxation (by city and county) and constraining the use of their property according to laws they’ve had no opportunity to vote on.
- Cities were not required to provide services at the time of annexation. In the meantime, the annexed areas had to pay city taxes while continuing to rely on county services. The fight for city services could drag on for decades and involve expensive lawsuits.
All of this gave cities every incentive to embark on patterns of predatory annexation in order to draw revenues into a their coffers — all without the trouble of persuading the people affected (or the cost of providing them services). When a city became financially over-extended or sought to fund projects beyond its capacity, it had essentially three avenues of action: increase taxes, lower spending, or annex high-value properties.
Increasing taxes is painful for taxpayers, and can even be counterproductive by driving residents and businesses out of a city. Lowering spending is painful for politicians who campaign for election to office on the promise of grandiose community projects and capital improvements. All too often, the least painful option for a city became forced annexation. The law allowed it, the voters weren’t able to stop it, and the cost-benefit ratio was favorable — for the city.
This state of affairs led to many efforts over the years to lobby state government for a change in the law to give people a greater voice in the annexation actions taken by cities in North Carolina. However, the burden on the individual citizen in effecting reform was great, because the people were not allowed to overturn annexation actions by referendum.
The new law allows, for the first time since the Annexation Act of 1959, for people in areas targeted for municipal annexation to vote on the matter and give them the option to either approve or deny the annexation. Now, if a city wants to annex nearby properties (for whatever reason) it must receive a majority vote of approval by the people who live there to proceed with that action.
Additionally, if less than a majority of the voters vote for the annexation, the municipality may not attempt to annex that area for at least 36 months. This also applies to people who live in what are called “Extra-Territorial Jurisdictions” (ETJs) and “donut holes” (areas which otherwise share no boundaries with a city or an ETJ).
Simply put, the new law prevents cities from unilaterally annexing neighboring communities without the approval of the citizens who live there.
(237 of North Carolina’s cities are run by city councils, 251 are run by city boards of commissioners, and 65 are run by city boards of aldermen. They vary in size, with Charlotte having the most at 11 elected council members and the Town of Ruth with just two. Click here to learn more about the different forms of city governments in North Carolina.)
- Involuntary Municipal Annexation: The Ugly Truth (by Barbara R. Hunter)
- What North Carolina’s Annexation Law Reforms mean to You (NC Center for Constitutional Law)
- Forced Annexation in NC ( The John Locke Foundation)
- North Carolina Municipal Annexation (NC Center for Constitutional Law)
- Annexation keeps North Carolina Moving Forward (pro-annexation position aper by the NC League of Municipalities)