Municipalities impose property taxes in exchange for providing extra additional services to residents. Under state law, towns and cities may expand — involuntarily annex additional land — as long as they provide additional services to their newly annexed residents. Is annexation, with the associated higher property taxes still allowed under state law if a municipality provides few, if any, services to its new residents? The answer, according to the N.C. Court of Appeals, is “yes.”
In July 2003, the Union County town of Marvin adopted a resolution to annex additional land, including property owned by William J. Nolan III and his wife, Louise C. Hemphill-Nolan. The Nolans challenged the legality of annexation, contending that the town’s action violated state public policy. Specifically, they argued that North Carolina law recognizes the importance of municipalities in providing the governmental services necessary to support residential, commercial, industrial, institutional, and government development, the land classifications that allow for annexation. Marvin, they noted, would provide them with no additional services beyond those which Union County already provided, thus undermining the very premise allowing the town to involuntary annex land.
A majority of the three-judge Court of Appeals panel did not agree with the Nolans’ contention, finding instead that Marvin had met all of the requirements spelled out in state law.
“… We agree with the trial court that sections 160A-33 and 160A-35(3) do not require respondent to provide additional services that the current residents of the municipality do not enjoy, or to duplicate services already provided to the area to be annexed,” Chief Judge John Martin wrote for the court.
“Rather, under the plain language of the statute, a municipality must provide to the annexed area ‘each major municipal service performed within the municipality at the time of annexation …on substantially the same basis and in the same manner as such services are provided within the rest of the municipality prior to annexation.’”
“Contrary to petitioners’ argument, section 160A-35(3) does not command municipalities to provide certain specific services, but ensures that whatever services are provided, are provided in a non-discriminatory fashion to those areas to be annexed.”
Martin’s opinion also suggested where the Nolans and others that might find themselves in a similar situation in the future should look for help. “We are not unsympathetic to petitioners’ contention they will receive very few additional services despite additional taxation. We are, however, bound by the plain language of the statute and case precedent. Petitioners must look to the General Assembly, and not the courts, for relief in such matters.”
The majority also rejected the Nolans’ contention that the annexation should be overturned as Marvin officials had refused to provide an answer at a public hearing as to why they were annexing the Nolans’ property. The appeals court agreed with the lower court that the Nolans were not materially injured by the town’s refusal, as any answer given would not have effected the validity of the annexation.
Judge John Tyson dissented from the majority holding, finding that Marvin’s annexation violated the intent of the state’s annexation laws. The legislative history and state case law emphasize, Tyson wrote, that higher taxes from being in a municipality comes in exchange for greater services. This Marvin’s involuntary annexation did not do.
“Respondent’s [Marvin’s] ‘harsh exercise’ of involuntary annexation offers petitioners nothing in return. Respondent demands the privileges of taxation and involuntary annexation without accepting the responsibility for providing needed urban or meaningful municipal services. Respondent’s purported involuntary annexation is a flagrant violation of the plain language, intent, and purpose of the statute and supporting case law.
“Respondent’s plan gives new meaning to the phrase ‘taxation without representation’ and adds to that phrase ‘or anything else.’ Respondent’s illegal conduct is exacerbated by its refusal to answer petitioners’ questions at a statutorily required public hearing and denial to petitioners of minimal due process. ”
N.C. Court of Appeals rulings are controlling interpretations of state law unless overruled by the N.C. Supreme Court. Because of Tyson’s dissent, the high court must hear the case if the Nolans further appeal.
The case is Nolan v. Village of Marvin, (04-1169).
http://www.aoc.state.nc.us/www/public/coa/opinions/2005/041169-1.htm
Michael Lowrey is associate editor of Carolina Journal.