Homepage

Sunday, February 22, 2004 8:29AM EST
Borderwars
By DEMORRIS LEE, Staff Writer

THE BIG ISSUE

An urban expansion wave has intensified opposition to a North Carolina law
that allows cities and towns to annex property without the permission of the
owner. The state says the policy is needed so people who enjoy the benefits
of urban living will share in the costs. Opponents say forced annexation is
a form of taxation without representation. How do we balance property rights
with healthy cities?

HOW IT WORKS
If an area is urban in character and a municipality can provide services,
state policy says the area should be part of the municipality.
To qualify for involuntary annexation, areas must:
* Border the current city limits; at least one-eighth of total boundary must
abut current city limits.
* Lie in unincorporated areas.
* Be developed for urban purposes as defined by a legal formula.
Annexed property owners must pay city and county taxes and are entitled to
services from both.

Ron Thoreson cherishes his home on a wooded acre in unincorporated Wake
County, even though it lacks round-the-clock paid police and fire protection
and relies on a septic system and well.
Living outside city limits means that Thoreson can burn trash if he likes
and that, when he steps out on his porch at night, no streetlights mask the
flicker of starlight. More importantly, it means he and his neighbors don't
have to pay city taxes.
All of that could soon change. The town of Cary has taken the first step to
annex 7,000 acres -- including the 240-home Dutchman Downs subdivision where
Thoreson lives. He and others are fighting the move.
"This is not a democratic process -- it's a dictatorship," said Thoreson,
head of a push to repeal the state law allowing property annexation without
the owner's consent. The group has a Web site -- www.stopcary.com -- to
spread its message and plans to lobby the General Assembly to give affected
property owners a vote on annexation. Group members call forced annexation a
form of taxation without representation.
Their urgency follows 3,906 annexations across the state between 1999 and
last year. Besides in Cary, forced annexations are at issue in Eden,
Fayetteville, Wendell and Winston-Salem, to name just a few places. State
law allows towns and cities to annex unincorporated urban areas on their
borders so long as they can provide such services as water, sewer, and
police and fire protection.
Proponents say involuntary annexation has many benefits: It keeps North
Carolina vibrant because it allows cities to expand their tax bases,
spreading the cost of essential services and public improvements over a
bigger pool of taxpayers. It helps regulate development and prevent the
proliferation of private wells and septic systems, which may harm the
environment. And it brings more services, including streetlights, sidewalks,
garbage pickup and access to parks and recreation programs. It also keeps
people living near cities from sharing the benefits without paying for them.
"Historically, [the state's annexation laws] are a big part of why cities
are strong," said S. Ellis Hankins, executive director of the N.C. League of
Municipalities. "I mean financially, economically, politically and socially.
Without the statutes, North Carolina would be a different place and
different for the worse."
Foes face tough opposition in their bid to change state law. State Sen.
Andrew Brock, a Republican who represents Davie, Rowan and Yadkin counties,
introduced a bill in April providing for a referendum on annexation. Under
the bill, which is stuck in the Rules Committee, property owners could
petition for a vote on possible annexations. City officials would then
decide whether the entire city or only the voters being annexed would cast
ballots. Another bill in the state House of Representatives would require
county commissioners' approval for annexations to go forward.
"It comes down to a sense of fairness, and I believe people should have a
say-so if elected officials decide to put a tax increase on them," Brock
said. "I have people from all over the state in great support of this bill,
and it is amazing just how disheartened they are." He said that Rules
Committee chairman Tony Rand, a Fayetteville Democrat, won't move his bill
and that it is unlikely to "see the light of day" because of opposition from
cities.
"But I'll keep reintroducing the bill," Brock added. "All we want is a vote
on it."
Rand said that he is not familiar with Brock's bill but that "planning in
urban areas is a tradeoff and is something we always need to watch and
continue to work on."

The state's reasoning
North Carolina, Tennessee, Idaho and Kansas are the only states where
annexation without the property owner's consent is standard. Louisiana,
Illinois and Oregon allow it in limited cases. The reasoning is that strong
urban development is in the public interest and that residents, if allowed
to vote, would be loathe to approve the added taxes that annexation brings.
Cities in North Carolina once needed the General Assembly's approval to
annex. By 1947, though, annexations were taking up more time than lawmakers
liked, and they changed the law to give cities the authority. Back then,
voters could force a referendum with petition signatures from 15 percent of
people in an affected area. In 1957, annexation requests in Greensboro and
Charlotte led the General Assembly to study the issue again, and it came up
with a law close to the one now in effect.
"People didn't want to get annexed any more then than they do now," said
David Lawrence of the Institute of Government at UNC-Chapel Hill. He noted
that the 1957 study concluded that a person who owns property close to a
city should expect to be part of that city and share responsibility for the
services it provides.
Typically, city services include police and fire protection, water, sewer,
road construction and repair, streetlights, garbage pickup, parks and
recreation. Responsibility for health services and schools, sheriff and
correction services falls to North Carolina's 100 counties.
Wake County manager David Cooke said cities are in a better position than
counties to provide services needed for North Carolina's growing population.
"We [Wake County] grow by 20,000 residents a year," he said. "In five years,
we will add 100,000 new people; in 10 years, 200,000. How we want to grow
and where are valid questions. We have said we want that growth in and
around municipalities because that's where the infrastructure is to handle
it."
David Rusk, an urban policy consultant from Washington, said annexation has
kept North Carolina strong. In his book, "Cities Without Suburbs," Rusk
compared Raleigh with Richmond, whose annexation powers were halted in 1970
by Virginia's General Assembly.
>From 1970 to 2000, Virginia's capital had suburbs springing up just beyond
its borders but could do nothing to get those residents to invest in its
core, Rusk said. Raleigh, however, was annexing the tax base into its limits
and was able to spread that money throughout the city. Poverty and
segregation are more pronounced in Richmond than in Raleigh.
Rusk sees other benefits to annexation. He said North Carolina's cities are
economically stronger so they are considered better credit risks and can
borrow money for public projects at lower interest rates than those in
Virginia. Annexation also means North Carolina lacks the welter of small
local governments and overlapping taxing districts that dot states such as
Pennsylvania and New York.
"For North Carolina to change its annexation laws that promote regional
success would be to abandon the wisest urban policy in the country for one
that inevitably leads to urban and regional distress," Rusk said.
But urban planner Sam Staley, who has written three books including "Smarter
Growth: Market-based Strategies for Land-use Planning in the 21st Century,"
said he sees no evidence for Rusk's view that cities who forcibly annex are
better off financially or socially.
"Many cities annex and give the appearance of population growth and income,"
he said. "But when you look, you find they have the same problems as other
cities. They've just been able to hide them."
Most cities annex for fiscal reasons, not so they can provide better
services, he said, and because a city annexes your neighborhood, it doesn't
necessarily mean you get better government. People move to unincorporated
areas because that's the level of service they want, Staley said.

A matter of balance
That argument resonates with Priscilla McCloud, who has lived in Arran
Lakes, a Cumberland County subdivision, for 26 years. To the objections of
many, her neighborhood will become part of Fayetteville on June 30. The
annexation of about 43,000 residents is the largest in the city's history.
"I have good garbage service, great water, and when I needed to call the
sheriff's department, they've been Johnny on the spot," she said. "I have
streetlights. I don't have sidewalks, but neither does half of the folks who
live in the city. I'm getting annexed because the city needs the tax money
to put services where they haven't yet. I may be wrong, but I don't think in
my lifetime I'll get the services the city promises."
To city manager Roger Stancil, it comes down to balancing the public good
with individual property rights.
Cumberland was the only county to win exemption from North Carolina's 1959
annexation law, and it wasn't until 1983 that Fayetteville was allowed to
annex without referendums. The result, Stancil said, was a large urban area
that looked like a city but had no city services. By 1972, the area had
about 60,000 septic tanks. "It was a ticking time bomb," he said of the
potential for environmental damage. Once allowed to annex, the city invested
about $50 million on sewer and water improvements.
"We had to look at the overall community," he said.
That's also the aim of Raleigh's plan to annex nearly 1,300 people in the
city's north end this year, including the Fox Glen, Remington Park and River
Landings subdivisions. Some of the areas are so-called "doughnut holes,"
unincorporated areas surrounded by the city. Those property owners pay only
the county's tax rate of 60.4 cents per $100 of assessed value. The
annexation, which has encountered no widespread opposition, will add
Raleigh's 38 cents per $100 to their property tax bills.
Meanwhile, residents near Wendell are fighting the annexation of about 260
acres along Wendell Boulevard, N.C. 97 and Edgemont Road. The area
encompasses about 200 developed properties and 700 undeveloped tracts
between the town's current limits and the U.S. 64 Bypass, now under
construction. The town wants to control how that property will be developed,
with a potential eye to commercial growth and the higher tax returns it
would bring. So far, foes have held up the process, demanding that town
officials follow state law to the letter.
"It's unjust for the municipality to extend boundaries and force those
citizens to pay taxes," said Ray Lamb, president of the Bridgegate
Homeowners' Association. Annexation will add 54 cents per $100 to their
property tax bills. "It's very unjust for the citizens to move out to a
suburban area then the city comes in and wants to tax them, especially when
they are not going to be able to provide services at the tax rate."
The politics of annexation have been especially contentious in Cary, which
quadrupled its land area between 1980 and 2000 through annexation.
Folks in Dutchman Downs thought they had dodged annexation in December when
Cary dropped a massive annexation plan during a dispute with Holly Springs.
Both towns wanted control of the same unincorporated area, and opponents
fought being part of Cary. Now Cary is taking another approach. It has asked
Wake County to put 7,000 acres along its southern border, including Dutchman
Downs, under Cary's jurisdiction. If the county agrees, Cary will
immediately control development in the area and will have 10 years to annex
it.
Already, Thoreson and others are fighting back, hoping that when Dutchman
Downs comes up for annexation, they will be able to vote on it.
Cary Mayor Ernie McAlister said that state policy means the area should be
part of Cary and that North Carolina's annexation policy is sound.
"If it wasn't for those laws, you could have three times as many
municipalities, with a section outside of Raleigh called North Raleigh, or
outside Cary called Lochmere," he said. "As people move from the middle of
town to those areas, it keeps them contributing to the health of that
community."
To UNC's Lawrence, it's about values.
"On one side is the value that you let people vote on this sort of thing,"
he said. "That's the value in place in a lot of states. The other is trying
to maintain the fiscal heath of cities and the sense that the metropolitan
community is one community and a small area shouldn't have the right to
affect the whole community. People will react to those values differently,
and you have to make a choice."

© Copyright 2004, The News & Observer Publishing Company.