Annexation Facts

1. Annexation harms counties financially by removing their share of state sales tax and wholesale beer tax. Cities will explain that sales tax and wholesale beer tax revenues lost to the county by annexation will remain the county’s for 15 years after the date of annexation. This is true. However, inevitable increases in the growth of these taxes goes immediately to the cities and not the counties during the 15-year period. (See TACIR report OCT. 24, 2013 page 7). While the law intended the wholesale beer tax in annexed areas to remain with the counties for the 15-year period and only increases during that period be paid to the cities, the TACIR study discovered the entire beer wholesale tax has been paid to the cities by mistake. (See TACIR Report Page 8). After 15-year period all county taxes cease.
2. Counties facing these loss of taxes must curtail services or raise taxes to make-up the difference;
3. Tennessee is only one of three states that allows forced annexation to occur without referendum or other statutory protection for those annexed;
4. If the state or the county desires more revenue it must grow its economy or raise more taxes—under the current law cities can simply annex new taxpayers in allowing their mayors to run for later office claiming their never raised taxes;
5. Cities will tell you they must grow in order to survive financially. If this is true then the economic model of cities is invalid and all cities will inevitable collapse when there are no areas left to annex. A recent study by the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) dated 10/24/2013 found no evidence to support such a claim.
6. Any objective review of growth by annexation since 2000 will clearly show, that annexation has become a hunt for revenue not a desire to provide services where services do not exist;
7. Cities often state that they have extended utilities beyond their municipal boundaries and that they may not be able to recoup their utility investment beyond their corporate boundary unless they can annex those areas by ordinance. TACIR found this statement to be invalid stating, “It must be noted that the law in Tennessee requires public utilities to be self supporting, funded by rate payers”;
8. The annexation of agricultural lands can dramatically change or eliminate pre-annexation allowed uses of land;
9. The discharge of firearms for any purposes is generally denied by most cities;
10. In approximately 1996 the Speakers of the House and the Senate created an Ad Hoc committee to study annexation and were instructed to consider, among many issues, “whether the citizens in an annexed area should have the right to vote.” The Democratically controlled house and senate determined that the right to vote was not necessary;
11. Tennessee is NOT a red state. We are red counties being taken over taxed and regulated by blue cities.

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