North Carolina General Assembly
The passage of House Bill (HB) 925 makes it more difficult for cities to expand because only residents in an area being annexed are allowed to vote on whether or not the annexation should take place. Residents already living inside the city limits would not be allowed to vote. The passage of House Bill (HB) 5 cancels lawful annexations by nine cities, including Wilmington’s annexation of Monkey Junction. The bill took effect on July 1, 2012.
Annexation important to city's tax rate
Taking away cities’ right to initiate annexations has a direct impact on how much city residents pay in property taxes. If cities can no longer initiate annexations, they can no longer grow. If cities can’t grow, they either have to raise the property taxes of city residents or cut services.
There are many reasons annexations benefit cities, click here to learn more.
Without the ability to annex areas near or next to the city limits that are just as urban as area inside the city limits, the amount of sales taxes the city receives becomes even more important. The city has no say in how this revenue is distributed, which can be done based on the county’s tax rate or based on population. New Hanover County’s is based on the tax rate instead of population, which has a significant impact as the majority of residents live inside the city limits. Only New Hanover County or the NC General Assembly can change the distribution formula.
Changing the way sales tax revenue is distributed is an important priority for City Council.
City’s ability to raise revenues limited
Existing state and local laws greatly restrict how much money the city has to operate, or how it can increase revenues in order to maintain the current level of services. Click here to learn more.