Annexation: The Motive Matters
reprinted with permission of IPR
by Jason Arp
My constituents are scratching their heads. They don’t remember annexation being a topic of discussion during last year’s municipal elections. There was discussion of riverfront development. There were whispers about an arena. But not a word about annexation. It’s difficult, then, for a councilman to gauge citywide sentiment on the issue.
Many of my neighbors in the Aboite area of Fort Wayne still cringe at the word. For annexation is a big deal. It is incorporating people and property into much more than just a geographical area. And its impact is not just financial. It is extending authority over people.
It changes ordinances and laws under which people and property are subject. Places where smoking was permitted become places where smoking is prohibited. Places where people could burn leaves, discharge firearms, keep chickens and grow gardens suddenly become places where those things are forbidden. This new authority has the ability to plan, zone and use eminent domain.
And in the case of the annexation currently before the Fort Wayne City Council, this is all achieved without the input of those affected. Remonstrance was taken off the table by a waver in the sewer-connection agreements of many neighborhoods. There will be no real consent, therefore. Indeed, we can be fairly certain this annexation could not be achieved voluntarily.
The financial aspects are pretty clear. Annexed residents will have to pay more in taxes to maintain the desired funding for the things being funded now. The majority of their property taxes will be redirected from their school corporations, libraries, township fire departments and county services to the city of Fort Wayne. Eventually, the school districts will have to schedule referendum votes in hopes of making up the difference.
What has not been openly discussed is the motive for this annexation. The current plan appears to raise $5 million in net new money for the city’s general fund, and that is after the expense of extending the promised city services to the annexed area.
The city has not explained why it needs that additional $5 million. If the reason is related to basic city services, then this plan is untenable because we are extending those same services to a new area. If the problem is a backlog of road repairs in Aboite or Georgetown, it doesn’t make sense to annex a new area that will someday have its own backlog of roads to repair.
The unstated motive is to pay for economic "development” (that’s code for enriching well-connected people). Nobody was shocked reading last Sunday's letters column to see the huzzahs for annexation from the Chamber of Commerce set. This is the same crowd pushing an unpopular arena and other publicly subsidized buildings downtown. Could the $5 million a year in net new revenue be used to pay the coupons on the bonds issued to finance vacant properties there?
Why these folks are asking the city to subsidize adding supply to a market with inadequate demand is a mystery unless you assume the goal is to crush the prices of existing properties. If that is the goal, there is evidence of success. The eight-story Wells Fargo Indiana Building at Wayne and Calhoun sold for over $28 million in 2005. It was assessed at $11 million in 2013. It transferred to U.S. Bank in bankruptcy procedures at $6.5 million in December 2015.
So instead of doubling down and dragging additional residents into to this speculative morass, maybe it’s time to re-evaluate our strategy for economic "development." Perhaps we should explore utilizing the free enterprise system. It would be less expensive to the taxpayer, and the results surely couldn’t be any worse.
Jason Arp represents the 4th District on the Fort Wayne City Council. He wrote this for the Indiana Policy Review Foundation.
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by Jason Arp
My constituents are scratching their heads. They don’t remember annexation being a topic of discussion during last year’s municipal elections. There was discussion of riverfront development. There were whispers about an arena. But not a word about annexation. It’s difficult, then, for a councilman to gauge citywide sentiment on the issue.
Many of my neighbors in the Aboite area of Fort Wayne still cringe at the word. For annexation is a big deal. It is incorporating people and property into much more than just a geographical area. And its impact is not just financial. It is extending authority over people.
It changes ordinances and laws under which people and property are subject. Places where smoking was permitted become places where smoking is prohibited. Places where people could burn leaves, discharge firearms, keep chickens and grow gardens suddenly become places where those things are forbidden. This new authority has the ability to plan, zone and use eminent domain.
And in the case of the annexation currently before the Fort Wayne City Council, this is all achieved without the input of those affected. Remonstrance was taken off the table by a waver in the sewer-connection agreements of many neighborhoods. There will be no real consent, therefore. Indeed, we can be fairly certain this annexation could not be achieved voluntarily.
The financial aspects are pretty clear. Annexed residents will have to pay more in taxes to maintain the desired funding for the things being funded now. The majority of their property taxes will be redirected from their school corporations, libraries, township fire departments and county services to the city of Fort Wayne. Eventually, the school districts will have to schedule referendum votes in hopes of making up the difference.
What has not been openly discussed is the motive for this annexation. The current plan appears to raise $5 million in net new money for the city’s general fund, and that is after the expense of extending the promised city services to the annexed area.
The city has not explained why it needs that additional $5 million. If the reason is related to basic city services, then this plan is untenable because we are extending those same services to a new area. If the problem is a backlog of road repairs in Aboite or Georgetown, it doesn’t make sense to annex a new area that will someday have its own backlog of roads to repair.
The unstated motive is to pay for economic "development” (that’s code for enriching well-connected people). Nobody was shocked reading last Sunday's letters column to see the huzzahs for annexation from the Chamber of Commerce set. This is the same crowd pushing an unpopular arena and other publicly subsidized buildings downtown. Could the $5 million a year in net new revenue be used to pay the coupons on the bonds issued to finance vacant properties there?
Why these folks are asking the city to subsidize adding supply to a market with inadequate demand is a mystery unless you assume the goal is to crush the prices of existing properties. If that is the goal, there is evidence of success. The eight-story Wells Fargo Indiana Building at Wayne and Calhoun sold for over $28 million in 2005. It was assessed at $11 million in 2013. It transferred to U.S. Bank in bankruptcy procedures at $6.5 million in December 2015.
So instead of doubling down and dragging additional residents into to this speculative morass, maybe it’s time to re-evaluate our strategy for economic "development." Perhaps we should explore utilizing the free enterprise system. It would be less expensive to the taxpayer, and the results surely couldn’t be any worse.
Jason Arp represents the 4th District on the Fort Wayne City Council. He wrote this for the Indiana Policy Review Foundation.
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The Indiana Policy Review Foundation exists solely to conduct and distribute research on Indiana issues. Nothing written here is to be construed as reflecting the views of the Indiana Policy Review Foundation or as an attempt to aid or hinder the passage of any bill before the legislature or to further any political campaign.
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