Annexation has been a subject of controversy and contention in North Carolina for many years — most especially with regard to what is called “forced annexation.”
For nearly a half-century, North Carolina was one of only three other states left in the nation that allowed a city to annex private property outside its borders — and tax the residents who lived there — without their consent. (UPDATE: Tennessee, taking its cue from North Carolina’s historic reform efforts, passed a law in April 2014 which also ended the practice of forced annexation in that state.)
Until the new majority finally gained control of the General Assembly here three years ago, forced annexation had gone essentially unchanged since 1959. For 170 years, the state legislature set the boundaries for each of North Carolina’s cities. But in 1959, the General Assembly passed the “Annexation Act,” delegating nearly unlimited annexing authority to the cities themselves. That law allowed annexation of private property in the county by voluntary or involuntary (forced) means. If a city saw a financial benefit to itself, it could move forward on a forced annexation action with just a simple majority vote of its governing board. (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.)
If residents of an outlying area in the county saw benefit to being annexed into a nearby city, they could petition the city for inclusion within the city’s boundaries. City property owners pay both city and county taxes, and should receive the same level of municipal services, like trash removal and sewer service, although historically this has not always been the case.
The city could also forcibly annex an outlying area if it met certain specified population, density and commercial development criteria. Usually, the area would also have to physically border the city, but exceptions were often made for non-contiguous areas.
These involuntary methods of annexation didn’t allow for a vote of the people in the targeted area; as long as the targeted area met the loose criteria, a city was able to proceed with its forced annexation through a required sequence of formalities.
Whether the annexation was voluntary or involuntary, the annexing city was required to publish a schedule for providing city services to the new residents, and the city was given a grace period of several years to actually provide those services. However, immediately upon the annexation, property owners in the targeted area would be subject to all the new city taxes and fees, zoning laws and other onerous bureaucratic regulations. And this is where the controversy regarding “forced annexation” came into play.
To reiterate: 1) a city was allowed by state law to annex areas without the consent of those people targeted for annexation; 2) those new residents immediately fell under all the laws, taxes and land-use controls of the city, subjecting them to double-taxation (city and county) and constraining the use of their property according to laws they had no opportunity to vote on; and 3) cities were not required to provide services at the time of annexation — but in the meantime, property owners in the newly annexed area were required to pay all the additional city taxes and fees without necessarily getting the benefit of city services. The fight to actually receive associated city services sometimes dragged on for decades and involved expensive lawsuits.
For over 50 years, this virtually unlimited power gave cities every incentive to embark on patterns of predatory annexation — in order to draw new revenues into a city’s coffers without the trouble of holding a vote by the people or the cost of extending the requisite services. And when cities would become financially overextended or they would seek to fund projects beyond their ability to pay for them, essentially they had three avenues of action: increase property taxes, cut spending, or annex high-value properties.
Increasing property taxes is politically unpopular and can even be counterproductive by driving residents and businesses out of the city. Lowering spending is sometimes difficult for city politicians — who regularly get elected on the promise of favors, handouts and grandiose feel-good projects. All too often, the least painful option for a city became forced annexation: state law allowed it, the voters weren’t able to stop it, and the cost-benefit ratio was favorable — to city governments.
Basically, North Carolina’s annexation law was a political tool that allowed cities to increase their revenue without having to raise property taxes on existing city residents. This led to many efforts over the years to lobby state officials for a change in the law — reform that would give the people a voice in the annexation process.
Historic Annexation Reform
The burden on ordinary citizens to effect annexation reform was great, and with an unsympathetic party in charge of the legislature for so long, hope for reform was bleak — until 2012, when House Bill 925 was passed into law. The legislation allowed, for the first time in more than fifty years, for people in areas targeted for forced annexation to actually vote on the matter. The new law puts several protections in place. It requires 1) that a city provide at least one year advance public notice of its intent to annex, 2) notify affected residents directly by mail of its desire to annex property, and 3) hold a referendum on the proposed annexation during the next election.
Now, if a city wants to annex nearby properties (for whatever reason) it must receive a majority vote of approval by the people who are affected in order to proceed. If a majority of the residents don’t approve the annexation request, it does not go forward and the city is prohibited from trying to annex the same area again for 36 months.
- 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)