INDIANAPOLIS – Indiana’s annexation laws would get an overhaul under a bill passed by a Senate Committee today.
Sen. Phil Boots, R-Crawfordsville, tried a new tact this year by giving county commissioners an opportunity to review and reject annexations. But the veto power proved too controversial and the committee removed that language Thursday.
Instead, the committee reverted to language that passed the Senate last year before dying in the House. It would halt forced annexation altogether.
Boots said the purpose of the bill is to give people impacted by the annexations a voice in the process.
The practice of annexing large swaths of land – and the related property tax revenue – has been controversial for decades. And lawmakers have slowly cracked down on the practice – most recently in 2015.
But Senate Bill 23 would require cities or towns to get the signatures of 51% of the owners of land or the owners of more than 75% in assessed valuation of the land to annex it.
It would eliminate the entire remonstrance process in which citizens sign a petition to stop an annexation because no forced annexations would be allowed.
Lindsey Moss, lobbyist for the Association of Indiana Municipalities, opposed the new version of the bill. She said the 2015 changes added more protections and guardrails for Hoosiers.
"This bill would completely turn those reforms on its head by wiping them from the books,” she said. “We think the bar is set plenty high enough. This is still a growth tool for municipalities."
Ryan Hoff, of the Association of Indiana Counties, said the 2015 changes were an improvement but other units of government that lose tax revenue due to annexation still have no voice in the annexation process.
He said counties lose property tax revenue but still have to provide jails, courts, elections, tax collections and public health offices. He noted a recent annexation attempt in Fort Wayne would have meant other units of government – such as schools, county and townships – would lose $5 million. The loss of revenue is partially a shift and also related to homeowners now hitting tax caps.
Other revenue streams are impacted as well – such as local income and excise taxes.
"All revenue sources are unilaterally claimed by cities at the expense of other taxing units," Hoff said.
Under current law it takes 51% of landowners signing a petition to send it to court for review. But as long as a fiscal plan is valid it can still be approved. If 65% of the landowners remonstrate, it automatically kills the proposed annexation.
The bill now moves to the full Senate.