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Charlotte Area

Tough Choices Ahead As Charlotte Nears End Of Annexation Road

annexation map_0.JPG
Charlotte-Mecklenburg Planning Department

Think about this for a moment - back in 1960, the entire city of Charlotte was just 35 square miles.  Today it's more than 300 square miles. That's a 700 percent expansion as one neighborhood after another got swallowed up through annexation.

But now, there's not much land left to annex and recent changes to state law will make future annexation much harder.  No big deal, right?  Many people think Charlotte's plenty big. What few realize is the role annexation has played in the city's budget and tax rates over the years. WFAE's Julie Rose explains.

Property taxes are Charlotte's main source of revenue. So when the city needs more money for police officers or potholes, there are basically three ways to get it:  

1. Raise property taxes;

2. Wait for bigger homes and office buildings that command higher taxes; or 

3. Find a developing neighborhood and annex it into the city limits.  

Annexation can be fast, easy money – which partly explains why a map of Charlotte over time shows the city boundary steadily expanding like ripples in a pond.

Mayor Anthony Foxx says city leaders have taken that new money for granted.

"I think the mindset has been, 'We don’t have to worry about revenue growth because our growth policies are gonna take care of that for us,'" says Foxx. "That's been the mentality of an entire generation of politicians coming out of Charlotte for a long time."

And it's been the public's mentality too, adds Foxx. Charlotte's property tax rate has gone up just twice in the last twenty years. 

property tax history.JPG
Credit City Manager's Office
Charlotte's property tax rate has increased just twice in 20 years.

But watch out: a recent change in state law makes it harder to annex land if its residents object.  And frankly, there's little available land left to swallow.

"That's pretty much the case – the low-hanging fruit is gone," says Foxx.

Let's take a look at some of that low-hanging fruit:  It was undeveloped land plucked by the city through annexation in 2005. Today it's the NorthLake Mall, generating half a million dollars a year in property taxes for the city.  

2005 was a big year for annexation: Charlotte added 12 square miles and more than six million dollars to its  tax coffers including NorthLake Mall and the Steele Creek neighborhood in southwest Charlotte. But the annexation everyone talks about these days happened five years earlier – over on the other side of town.  

"We have been the ATM for the City," said Tim Timmerman at a town hall meeting in Ballantyne last November. 

More than half of Charlotte's property tax revenues come from the thriving and affluent neighborhoods of south Charlotte.  Mayor Foxx hopes to even things out by making other neighborhoods more attractive to development.  The plan calls for raising property taxes and the money would, among other things, extend the streetcar.  His pitch didn't go over well at the town hall meeting. There were shouts of interruption, and this from Timmerman: "I think the answer is be the mayor of all Charlotte (not just Uptown)."

Timmerman's part of a group agitating for the Ballantyne area to de-annex. When the annexation happened in 1999, there were 6,000 people living there, but none of the big fancy homes, shopping malls and office buildings.  

Becoming part of Charlotte meant developers could go gangbusters and the city would foot the bill for roads, streetlights and sewer lines.  Mayor Foxx likes to point out that residents in other parts of Charlotte put up that money. Now, he says, it's time for everyone to pitch in on repairs and improvements in neighborhoods that were annexed 40 and 50 years ago. 

"And frankly, there will be a time in the next 20 years when substantial amounts of dollars go into re-upfitting infrastructure that was put in place when Ballantyne was built," says Foxx. "It is a cycle. Every part of our city goes through these cycles."

But without new annexation, there's no easy way to pay the cyclical costs of a big city.

Catherine Heath of StopNCAnnexation says it's a day of reckoning for Charlotte officials: "They didn't have to face the true cost of the amenities and the things the city wanted to do."

Heath hopes the pain of raising taxes will make North Carolina cities slower to spend. That's already proven true in Charlotte where council members have been at an impasse for eight months over the Mayor's infrastructure improvement plan which calls for raising the property tax rate about 3 cents.