Ending Forced Annexation in Texas: Social Case Against Involuntary Annexation

Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


The Social Case Against Involuntary Annexation

We have previously noted that perhaps the two most often used reasons for defending involuntary annexation were to “expand the tax base” and to “manage growth.” If these phrases were allowed to stand on their own, unchallenged, then we can see why a planner might find them attractive. What city doesn’t want more revenue and higher-quality growth, however that is defined? The patent problem with both matters is that they relegate an entire segment of society to the dustbin of policymaking. Namely, both justifications for annexation take no heed of the poorest citizens who live outside of cities.

Expansion of the tax base is inherently discriminatory, because it requires cities to maximize the value they get from the properties they choose to annex. In this case, that value is tax value. To maximize tax value, the most highly appraised commercial and residential properties are preferred to those that yield a lower taxable value. The net result of this is that poor communities are rarely annexed, particularly if other options exist for municipal boundary growth.

Growth management is, like expansion of the tax base, an inherently discriminatory justification for annexation. Generally speaking, managing growth is really about making sure that the growth is as high-value and high-quality as possible. Managing growth is not about inclusion, but exclusion—some uses are allowed, while others are not.

A perfect example of this is the location of manufactured home communities in relation to major cities. Few major cities provide much opportunity for subdivisions focusing on such low-value growth to occur, even if the market demands it. As a result, many such communities are pushed to the fringes of cities, even far out into unincorporated areas. Lacking services such as regular municipal policing and other services provided largely by cities but less so by counties, these communities exist a world apart from the cities they orbit. They will continue to, because cities likely will not annex them once they are established outside the corporate limits.

The exceptionally common practice of preferring wealthier areas to poorer areas in annexation is evidence of the inherently discriminatory nature of the policy. Government is picking and choosing who it wants to constitute the growth of the municipality, which, as the economic case showed, deviates from the equilibrium of municipal services needed to meet the actual demand of the marketplace. If involuntary annexation were shuttered, it is reasonable to hypothesize that poor communities on the fringes of cities, as well as those within cities currently, would be some of the primary beneficiaries of the inclusiveness of annexation by consent, instead of by force.

Additionally, voluntary annexation has another potential benefit to better integrate low-income areas into their communities. Because these low-income areas at the fringes of cities potentially have the most to gain from an influx of new city services brought about by annexation, they become power brokers in the process of gaining consent for annexation. They are empowered to become part of the decision-making process by having an outsized role in how annexation is conducted, when, and where.

Ending Forced Annexation in Texas: Economic Case Against Involuntary Annexation

Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


The Economic Case Against Involuntary Annexation

Annexation is most often couched not as a question of philosophy, or whether local governments have some inherent right to annex that supersedes other considerations, but as a question of economics. Sometimes this takes the simple form of adding more tax revenue. In some cities, there is a more complex planning question of managing growth via the regulatory controls available to a city, as opposed to having development occur in an unregulated way just outside the municipal boundaries.

Putting aside the different, but related questions of how much cities should tax and spend or how much they should regulate, it is easily acknowledged that both uses make sense, whether or not they are justifiable unto themselves. It is also obvious that annexation affords a solution to both—absorb more property into the city to pay more taxes, and grab more property to manage how growth occurs.

Yet, it is not enough to merely assume that municipalities know precisely what kinds of policies to pursue independent of market forces and outside variables. It cannot be taken for granted that cities, acting on their own to determine the number of residents they should have and the amount of property that should be within their city limits, know precisely what kinds of services to provide or at what level.

What this means is that a city, acting to annex a property, determines that it knows precisely the right level of service provision for its citizens inclusive of that property. When property owners do not consent to the annexation, however, the potentiality for market forces to interact with the public choice of how to allocate public goods is eliminated. The city is acting in a vacuum, and quite possibly inefficiently, in how it allocates public resources. Far better is the model proposed by Charles M. Tiebout in his influential 1956 article “A Pure Theory of Local Expenditures.” Tiebout proposed that local governments necessarily respond to the preferences of the population in how they allocate government resources, as long as people are free to move from place to place and choose their jurisdiction. He wrote: “If consumer-voters are fully mobile, the appropriate local governments, whose revenue-expenditure patterns are set, are adopted by the consumer-voters.”34

In other words, if the citizen (here, the “consumer-voter”) is able to move from place to place, then a market will be created whereby the governments reflect the preferences of their populations. A reduction of the concept would simply be that people vote with their feet.

On its face, this makes a great deal of sense. Who has not observed cities rise and fall in accordance with changing preferences of populations? In the 18th and 19th centuries, the urbanization that accompanied the Industrial Revolution was a result of individual wishes to move where jobs and opportunity were more plentiful, as opposed to rural areas where there was less.

In modern-day America, cities such as Buffalo and Detroit have undergone large-scale population declines due to, among other factors, the loss of traditional local industries and the development of suburbs and exurbs.

Detroit is worth a look, however, due to not only its clear loss of industrial prowess, but also for other factors presaging its population decline. While it is certainly true that America’s changing economy, as well as the development of suburbs, played large roles in the decline of Detroit’s population, it is hard to now pin the responsibility only on these factors. Indeed, in recent years, much of the population decline in Detroit has been squarely the cause of poor local policy, which has resulted in the largest municipal bankruptcy in American history. Those who can afford to flee Detroit have done so; those who cannot have stayed behind and suffered one of the most dangerous cities in the United States with poor schools, crumbling public services, and few opportunities for improving their station in life.

One cannot rule out that many have left Detroit simply because its government has failed the people.

Voting with one’s feet does not entail that for every small change in policy there will be a mass exodus; nor does it mean that every person is equally empowered through his economic situation to make the choice to move from place to place.

Instead, the general rule, Tiebout postulates, is that “… the consumer-voter moves to that community whose local government best satisfies his set of preferences.”35 This also lends an understanding to how the decisions of individuals in choosing where to live affect the level of public expenditures in a given community.

A practical implication of this is in tangible public goods such as parks. If three cities existed adjacent to one another, but only one provided a high level of public expenditure for parks, that community’s level of public expenditures could only be maintained if public commitment to that amenity continued. If individuals moving to the community did not care for the expenditures on parks, they would express that desire by voting for public officials committed to reducing expenditures on parks and shifting that spending elsewhere, or cutting them altogether.

However, if in such a community, people moved in and continued their commitment to public expenditure on parks, not only would the city continue its expenditures, but the other two adjacent communities might also be incentivized to raise their spending on parks as well. However, the ultimate choice rests with the voters of the communities themselves: the public services that are provided at a given time are ultimately held to account by the existing voters of that community.

Prospective residents do not have the luxury of handpicking from a basket of services, so they choose communities that suit their needs and desires. This concept is not only supported by Tiebout’s theory—it derives from basic economic elements present in both the neoliberal and the Austrian schools. Austrian economists would speak of such ordering of priorities as a natural condition of the human experience, that people prioritize their wants and needs within themselves by the very process of making a decision. In choosing a community to live in, these ordinate preferences are expressed by what takes precedence—be it better schools, nicer parks, better roads, or the lowest tax rate.

Non-Austrians would apply public choice theory to this process of choosing a community, due to the nature of the incentives involved. A neoliberal economist might say that individuals making such a choice are motivated by preferences and factors that ultimately lead them to maximize their utility in one community or another.

Whichever method one chooses to apply, it is clear that, all other things being equal, individuals choose communities that best suit their preferences, and that the “market” for municipal services, if one can call it that, ebbs and flows around the shifting and varying preferences of different individuals. That these people have a right to choose where to live is implicit in their ability to express a preference in the first place.

But if the person who chooses to live at the outskirts of a city but not in it, or in an unincorporated subdivision, is annexed, what then? The choices he has made with regard to his property and what kinds of services he requires are no longer respected; in point of fact, they are disregarded entirely.

Just as when government intervenes in the market for private goods and services, involuntary annexation produces unintended consequences by interfering with the expected or normal outcome of a transaction; in this case, between a person and the jurisdiction he chooses to live in. Property owners in an unincorporated county in Texas have chosen to live just so, and unless they seek annexation by their own action, are thus satisfied with their choice to live in this manner. If it were not so, they would not have made that choice. Whether or not the choice of living without certain services seems “rational” to the public planner, no value judgment can be made about the choice made by people whose preferences differ from that of the perceived ideal. Therefore, a municipality that seeks to create a different outcome—that is, to eschew the preference of those who live in unincorporated areas—will quite possibly end up creating a situation where, at best, the property owner is dissatisfied with the municipality doing the annexation. At worst, the property owner will change his behavior in response to the annexation.

The first scenario is political, but it has real effects. If many people are forcefully annexed into a municipality and are unhappy with their new jurisdictional status, they will respond in ways that change the dynamic of the existing community as well as that within which they already live. They may decide to revolt against the status quo in the city that annexed them, changing the order of things for those existing residents who might have been content with the policies of the city.

The second scenario is economic, and produces the greatest damage. If property owners who are annexed involuntarily change their behavior in response to the annexation, grave harm has been done to the market for property and the natural order of growth and development.

Suppose a person who lives on the outskirts of a charter city of 5,000 where one storage complex operates, is planning to build one in order to compete with the existing business. Building the competing business would add more storage units to the market, possibly benefiting more consumers, and might drive the price of units down through market competition. At the very least, the competitor might have a more difficult time maintaining monopolistic prices with a nearby competitor.

However, upon being annexed, that property owner might lose his right to build a storage complex—a business that might be deemed unsightly within the newly-annexed area’s plan. In such a scenario, he may have to dispose of his property at a lower value than otherwise, and in turn, the market will lose the additional units and price competition it would have gained from the original, intended use. These unintended consequences crop up wherever annexation is done, but it is that which is not seen—the uses that are barred because of new regulations, and the increased cost of development, which prevent development or value from being what it otherwise would be—that creates the greatest negative impact.

Involuntary annexation creates a cascade of negative consequences that endanger the ability of the marketplace to respond to citizen preference for goods and services, and prevents economic growth from occurring as it ought to by interfering with the market.

Ending Forced Annexation in Texas: The Philosophical Case Against Involuntary Annexation

Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


The Philosophical Case Against Involuntary Annexation

In the beginning of the American republic, one of the fundamental principles at issue was the question of government’s relationship with the people. Was the government in some sense to rule the people, as had been the case under the British crown? Or was it to exist as a servant of the people, tasked with particular powers to be exercised within certain limits?

That question was largely resolved when one considers how the Founding Fathers resolved the matter. Instead of unifying all separate colonies into a single state under which varying territories, geographically distinct but with little independent governing authority, had to rest, they sought a far more decentralized form. Indeed, the first form of government chosen—the Articles of Confederation—clearly delegated the vast majority of power to the states and virtually none to the federal government. Arguably, the Articles of Confederation established, not a central government at all, but a coalition of the several states. After problems of coordination arose as a result of the near-complete independence of the states, calls for a new governing document arose.

Out of that arose the most famous governing document in human history—the United States Constitution. The Constitution was developed to improve the Articles of Confederation by creating a stronger central authority to bind the states together as a more apparent national government. Yet while it created a far more robust federal government than had existed in the years after the American Revolution, it was nonetheless based on the very same principles as the prior government; namely, that states were independent—not merely from one another, but in many ways, from the federal government as well.

This deference was far more than implicit. The Constitution itself is a document of enumerated powers, meaning that the national government can do nothing that is not expressly authorized within it. The Tenth Amendment to the Constitution clearly defers to the states in all matters not addressed by the Constitution. Similarly, there are few references to the states being restricted by the national government within the Constitution.

As the republic matured, westward expansion brought territories and then new states developed from the landscape. This did not, for the most part, happen as a result of federal authority being imposed upon the residents of the territories. Largely, it was at least partially the result of the residents of the territory pursuing, often aggressively, annexation into the Union. Some territories did not want to be annexed for a long time, while some sought annexation for years before it was granted.

The history of the United States Constitution and the development of the states show a great deal of respect for the principle of self-determination. Citizens had many states to choose from, and if they were not a state, they had to consent on some level to form one. While not explicitly protected within the Constitution, the freedom of movement is strongly implied by the Privileges and Immunities Clause, among other clauses within the Constitution. For example, if you didn’t like life in Massachusetts, you could move to New Hampshire instead.

John Locke, the English philosopher whose ideas were instrumental in the formation of the Constitution, argued that each person has fundamental rights that cannot be violated by any government. But Locke did not stop there. He further argued that to be proper, government depended upon the consent of the governed. The principle inherent in Locke’s philosophy is that government involves some measure of voluntary compliance, at least at base—for Locke believed that each individual is ultimately sovereign. To delegate some of his authority to a government, a person must first have a say in doing so.

This was made clear in Federalist 39, written by James Madison:

First. In order to ascertain the real character of the government, it may be considered in relation to the foundation on which it is to be established; to the sources from which its ordinary powers are to be drawn; to the operation of those powers; to the extent of them; and to the authority by which future changes in the government are to be introduced.

On examining the first relation, it appears, on one hand, that the Constitution is to be founded on the assent and ratification of the people of America, givenby deputies elected for the special purpose; but, on the other, that this assent and ratification is to be given by the people, not as individuals composing one entire nation, but as composing the distinct and independent States to which they respectively belong. It is to be the assent and ratification of the several States, derived from the supreme authority in each State, the authority of the people themselves. The act, therefore, establishing the Constitution, will not be a NATIONAL, but a FEDERAL act.32

Aside from being a powerful statement in defense of federalism, Madison’s words are also relevant to individuals living outside of a municipality and threatened by annexation. Government, deriving its power from the people and only from the people, cannot usurp the rights of the people. At the same time, the ultimate governing authority, that is, the people, delegate some measure of authority to ever-escalating levels of government. There was never a question, however, in the minds of the founders, where the ultimate authority resided.

Ultimately, the basic principle of self-determination is essential to the Lockean belief in self-governance. Individuals have a right to decide which government they live under. In modern parlance, this means 50 states, but it also means thousands of localities. In Texas alone, there are well over one thousand different cities.

Clearly, if we are to be consistent, allowing municipalities the power of involuntary annexation violates basic principles of the American republic.

Here, some will object, citing the oft-invoked “local control.” This is an attempt to take a preference and turn it into a principle. If choosing between a government farther away from the people, or one that is closer, most rational individuals would choose the latter. That does not mean, however, that the government closer to him is any more justified in violating his rights than the one farther. When speaking of annexation, proponents of unbridled municipal authority will often refer to a “right” that localities have. This is a clear sign of ideological murkiness. Governments have no rights. They have only authorities given them by the people—the people who, recall, have by their consent formed the government in the first place for certain purposes. There is no local government “right” to annex a person against his will.

If it were so, local governments, or at least cities, would necessarily be as sovereign entities unto themselves. This notion strikes against everything that the United States was founded upon. Supreme Court Justice Louis Brandeis famously wrote in New State Ice Co. v. Liebmann:

It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country. This Court has the power to prevent an experiment.33

Brandeis acknowledged the ability of states to serve as “laboratories of democracy,” as the term that sprang from his opinion famously became known. But in so doing, he also explicitly acknowledged two very important precepts: first, that no state could be a “risk” to the rest of the country; this, in fact, was so apparently obvious to Brandeis and to his intended audience that it bore no further elaboration; and second, that the “Court has the power to prevent an experiment” should its effects be harmful.

Without addressing the substantive questions relating to the relationship between the states and the federal government, Brandeis is correct: states are empowered to do many things on their own, in fact most things, but they ultimately answer to the people and are checked by a higher level if things go awry.

So too are cities empowered to do many things, most especially home rule charter cities. However, when they run afoul of the rights of their citizens, or impinge in some way upon the governing ability or authority of other municipalities, they must be checked—and as subdivisions of the state, the state is the appropriate authority to do so. In respecting and recognizing the role of the state to restrict municipalities when they step over the line, we do not abandon the principle that government ought to be as close to the people as possible—but instead, we place the protection of the individual above the protection of the government. Government should never be able to wittingly or unwittingly trample upon the rights of the people, because the people are the fount of all government power—as such, it is not only right, but essential, to restrict that authority when it falters in preserving the rights of the people above all else.

Involuntary annexation is an unjust exercise of government power, because the ultimate authority for that power rests with the people. Government is the servant—not the master.

Ending Forced Annexation in Texas: Case for Self-determination

Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


Case for Self-determination

There are significant philosophical, economic, and social consequences associated with involuntary annexation. Each needs to be fully addressed. The following sections address these areas one by-one, and in some depth. For involuntary annexation to be a just policy, it needs to answer three questions:

  • Is it right?
  • Is it fiscally responsible?
  • And, finally, is it socially responsible?

As the reader will discover, not only does annexation fail on any one of these accounts, but quite certainly on all of them.

Ending Annexation in Texas: Home Rule Annexation

Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


Home Rule Annexation

In stark contrast to general law cities, home rule cities in Texas have great latitude to annex without need of any consent from those being annexed. This broad authority is subject to any restrictions required by a city’s charter, although most home rule charters prescribe the broad authority allowed by state law.23

That authority is outlined in Chapter 43 of the Texas Local Government Code. Although municipalities may unilaterally annex without the consent of property owners, home rule annexation is nonetheless governed by certain statutory restrictions, as follows: ƒ

  • Home rule cities may only annex within their Extraterritorial Jurisdiction (ETJ), unless they own the land.24 ƒ
  • Every home rule city must prepare and maintain a municipal annexation plan.25
  • Municipal annexation plans must be made available on the websites of home rule cities, if applicable, including the posting of any amendments to add or withdraw areas from the plan.26 ƒ
  • Home rule cities must compile a “comprehensive inventory of services and facilities provided by public and private entities” for any areas proposed for annexation.27 ƒ
  • Municipalities may not annex a total area more than 10 percent of their current municipal corporate limits. However, if a city does not annex 10 percent of its area within a year, it may carry that authority over to the next year, so that the area which may be annexed is subject to cumulative rollover based upon how much less than 10 percent of its total area a city actually annexed. However, the total annexation for a given year cannot exceed 30 percent of current incorporated area, even with rollover.28 ƒ
  • Municipalities must prepare a service plan for any area proposed for annexation within nine months of the service inventory, detailing how municipal services will be provided to the area once it is annexed.29 ƒ
  • Municipalities must provide to the annexed area an equivalent level of municipal services provided to current residents and property owners. Within most cases, this must be accomplished within 2 1/2 years after the effective date of the annexation. Cities may also propose a schedule to extend services that extends the deadline for service provision to 4 1/2 years. ƒ
  • Some services that are provided by cities to residents must be provided immediately to annexed areas as soon as the effective date of annexation. These are police and fire protection, emergency medical services, solid waste collection (unless residents use private providers), operation and maintenance of water and wastewater facilities not serviced by another local authority, road and street maintenance, operation and maintenance of parks facilities, and operation and maintenance of any other public facilities.30 ƒ
  • Before annexation proceedings may be initiated, two public hearings must be held within 90 days of the inventory of services being provided to the public, with at least one hearing being held in the area proposed for annexation if a facility for doing so is available, and if more than 20 residents of the proposed area file a written protest of the annexation with the city secretary. Notice of these hearings must be posted on the city’s website, if applicable, as well as in a newspaper.31

While there are some other stipulations under the relevant statutes, these are the primary restrictions on home rule annexation authority.

Ending Forced Annexation in Texas: General Law Annexation

Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


General Law Annexation

General law cities in Texas are statutory cities. That is, their authority to act upon various issues derives entirely from state statute. In this sense, the relationship between general law cities and the state of Texas may be said to be governed by Dillon’s Rule. They may do only what the legislature or the Constitution gives them the authority to do.18 Therefore, state statute defines specifically what and how a general law city may annex.

With few exceptions, the commonality to general law annexation is that it is voluntary and initiated by property owners. The exceptions are extremely specific and generally bracketed to only include particular municipalities at particular population levels. For example, one such exception stipulates that a municipality with a population of 1,762-1,770, “part of whose boundary is part of the shoreline of a lake whose normal surface area is 75,000 acres or greater,” may practice involuntary annexation, that is, not seek the consent of landowners as most general law cities must.19

In most cases, however, general law cities may only annex if the annexation is voluntary.

Type A general law cities are allowed to annex areas where a majority of qualified voters vote in favor of annexation and the area is one-half mile or less in width. An area adjacent to a Type B general law city may vote in favor of being annexed,20 subject to a total size requirement depending upon the population of the municipality.21 Interestingly, statute does not stipulate any particular method of voting by the residents, only that the vote be acceptable to the city council and that three voters file an affidavit regarding the vote.22

Ending Forced Annexation in Texas: Harris County Annexation War

Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


The Harris County Annexation War

Perhaps the greatest example of how unchecked Texas municipalities’ annexation authority once was is the annexation war that occurred between Houston and smaller cities of south and east Harris County during the postwar period of the mid-20th century. Today, the city of Houston covers 634 square miles, big enough to contain New York, Washington, Boston, San Francisco, Seattle, Minneapolis, and Miami.10 But it wasn’t always that way.

From its inception, Houston consistently grew. By 1940, Houston had reached a size of 72.8 square miles. For the sake of comparison, Washington, D.C. comprises only 61.4 square miles.11

Then, concerned about being cut off by suburban towns incorporating around it, Houston decided that it wanted to grow—and fast. It found a leader in Mayor Oscar Holcombe, who took the initiative in growing the city through forced annexations.

But in order to grow the city, Holcombe had to deal with the neighboring cities. The most ambitious of these, arguably, was Pasadena—an industrial community with its own dreams of growing bigger. As the decade of the 1940s wound down, the war between Houston and Pasadena over territorial expansion became steadily more intense. Houston, as it would turn out, had the last laugh in the battle.

The December 31, 1948, issue of the Lubbock Evening Journal, in a story entitled “Houston Annexation Doubles City’s Size,” noted that “Sprawling Houston took a big chunk from outlying areas today, doubling its present size with an annexation of 115 square miles where 111,000 persons reside.”12

The story paraphrased unnamed councilmen saying “… all limits within a 15-mile radius of the heart of downtown Houston would be adjoined to the city proper.”13

The August 20, 1949, issue of the Galveston Daily News, in a story entitled “Race to the Sea,” stated:

One of the most interesting intercity rivalries in Texas today is that between Houston and Pasadena… this particular conflict involved Houston’s apparent attempt to encircle Pasadena, possibly with the idea that it might be able, in so doing, to force the smaller industrial city to give up the ghost and become a part of the sprawling Babylon on the bayou.14

The story went on to say that since “… Houston went on its annexation binge, and Pasadena did the same thing…” they had become “… almost like two families living in a duplex.”15

The conclusion of the story presaged the concerns of lawmakers who would later pass annexation reforms: “… overexpansion too rapidly is a dangerous thing, as both Houston and Pasadena probably will discover in time.”16

In reality, Pasadena could never compete with Houston’s aggressive annexations. Indeed, the 1940s were just the beginning of the rapid expansion of Houston.

In the coming years, Houston would grow to resemble the massive city that it is today. By the end of the 1950s, it constituted close to 1 million residents and 350 square miles.17

Not long after Houston’s rapid expansion and territorial battles with surrounding cities, the annexation process was reformed to include what is now known as the Extra-Territorial Jurisdiction, or ETJ, with the Municipal Annexation Act of 1963. Cities retained much of their authority to annex citizens without consent, but how much annexation could take place was constrained to within the ETJ.

In the mid-1990s, Houston again stirred controversy by rushing through the annexation of Kingwood, a large suburb north of Lake Houston, northeast of George Bush Intercontinental Airport, and far away from the then-city limits of Houston. Because Kingwood was then isolated as an island of higher property values in that part of Harris County, Houston used what is now referred to as “shoestring annexation” to draw a line up Highway 59 to create a contiguous area for annexation purposes. It was very controversial and ultimately led the Texas Legislature to reexamine municipal annexation authority as the 1990s came to a close.

The Kingwood annexation eventually led to another set of legislative reforms at the turn of the century, primarily ensuring that cities planned for annexation and the provision of services, and placed a time limit on how long a city could delay before fully providing services to a newly annexed area.

While Houston’s annexation history is not necessarily indicative of the entire state, or how other municipalities have conducted annexations over time, it does parallel the municipal awakening to annexation authority, and the subsequent legislative responses, over the years.The current annexation statute reflects legislative reforms initiated in large part due to Houston’s annexation activities. There are, generally speaking, two kinds of annexation in Texas for municipalities: general law and home rule annexation.

Ending Forced Annexation in Texas: Creation Home Rule Annexation

From Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


The Creation of Home Rule Annexation Authority

Municipal annexation has a storied history in Texas.

Under the original Republic of Texas and then the state, cities were required to pass a bill through the Legislature in order to annex property. Indeed, cities themselves were created, not by local incorporation, but by state law. In 1858, Texas began allowing for local incorporation and general law annexation via petition.Then in 1912, the Home Rule Amendment to the Texas Constitution allowed cities of 5,000 in population to adopt, through election, home rule charters that gave them significant power to make decisions locally.To be more specific, home rule charters gave cities the authority not prohibited them by the state, including the authority to annex territory outside existing municipal boundaries.

To understand why home rule charters were created in the first place, one must understand the background of something called Dillon’s Rule. Dillon’s Rule is a legal theory that localities should wield no more authority than that specifically delegated to them by state statutes. With the exception of home rule charter cities, Texas is, to a great extent, a Dillon’s Rule state. For instance, general law cities have limited statutory authority compared to home rule cities.

To understand why most states adopted Dillon’s Rule, one must consider Justice John Forrest Dillon, for whom it was named, and the problem he was trying to address. Dillon was a famous Iowa State Supreme Court Justice in the 1860s who was elevated by President Ulysses S. Grant to the Eighth Circuit Court of Appeals in 1869.During this period, many large American cities were rife with special interest influence and outright corruption. It was during this time that New York City was infamously run by the corrupt “Boss” Tweed and his political machine known as Tammany Hall, which stole millions from the city.7

Because of such problems, Dillon did not trust local government, calling it “unwise and extravagant.” His 1868 ruling in Clinton v. Cedar Rapids and the Missouri River Railroad found that: “Municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature.”8 This laid the foundation for his theory, which he delineated further in Commentaries on the Law of Municipal Corporations.

Nearly simultaneously, however, Justice Thomas Cooley of the Michigan Supreme Court was arguing the exact opposite. In 1871’s People v. Hurlburt, Cooley wrote that “local government is a matter of absolute right; and the state cannot take it away.”9

These two legal theories competed for years, but Dillon’s Rule largely won as the 1870s came to a close. States began to become involved in many matters of largely local concern, and cities in states that adopted Dillon’s Rule were drastically limited in the authority they could exercise.

The backlash over Dillon’s Rule led to the movement toward home rule cities, whereby localities could establish charters that served as a sort of local constitution. Missouri was the first to adopt a constitutional home rule provision in 1875, but Texas was not far behind with its 1912 law.

After 1912, there was virtually no limit whatsoever on the authority wielded by cities to annex, as long as they qualified to adopt home rule charters. Many did, and it was not long before municipal annexation authority was regularly—and dramatically—being exercised throughout the state.

Ending Forced Annexation in Texas: Introduction

From Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)

Introduction

Municipal annexation has long been controversial in Texas, with proponents and opponents differing greatly on how to address such basic matters as property rights and self-determination. While annexation may be the nominal question, the real issue at hand centers around a more fundamental debate on the role of government.

For their part, cities are often focused on the added tax revenue and regulatory control that annexation gains them, but can sometimes underestimate or neglect other considerations, such as capital costs and long-term operations and maintenance expenses associated with providing equivalent services to the annexed area.

Property owners, meanwhile, often resent being annexed against their will. Concerns that their property rights are being infringed upon are not currently addressed by current annexation law and procedure, but continue to be raised. These fundamental questions underlying annexation policy deserve an answer.

Local governments have always been given a certain degree of deference in Texas, because Texans value local decision-making. Indeed, a 1980 study found that Texas law gave its cities the greatest “local discretionary authority” of any state in the nation.1 However, Texas also has a rich history of protecting the rights of its citizens from government intrusion and infringement. The broad discretionary authority exercised by cities can, and does, impinge on the rights of Texans in the area of annexation. This recognition has seen other states move toward reform.

Indeed, in recent years, many states have passed reform of municipal annexation authority. In April 2014, the Tennessee General Assembly passed, and the Governor signed, a bill ending involuntary annexation. North Carolina passed a similar bill in 2012 that “provides affected property owners with notice and multiple opportunities to comment on, and contribute to, the annexation plan.”2 Both require a referendum of the citizens who live in an area proposed for annexation.

In Texas, involuntary annexation is not only legal, but commonly used by cities. Citizens regularly rise up against municipal annexations of their property, but with little recourse available to them, such efforts are usually fruitless. Texas is the largest of a dwindling number of states (including Indiana, Kansas, Kentucky, and Nebraska) that allows involuntary annexation. In the vast majority of states, however, annexation requires some kind of input from the area to be annexed—whether by election or petition.3

More than ever before, Texans are wary of having their property rights stripped away. As government at all levels seems increasingly bellicose toward the natural rights that Americans have long held dear, it is the duty of all concerned with maintaining the just and proper role of government to question institutions that threaten individual liberty.

To that end, this study shall consider annexation in Texas, both from a historical and a modern perspective, to shed light on the status of the issue in our state and where it stands in our country. It will consider the arguments of both the proponents and opponents of involuntary annexation, and provide a broader philosophical perspective on the issue.

Finally, we shall conclude with a comprehensive policy proposal for lawmakers that would reform the present annexation law to include the protection of both property owners’ rights while also addressing concerns regarding restrictions of local authority.

Ending Forced Annexation in Texas: Executive Summary

From Ending Forced Annexation in Texas: Hon. Jess Fields & James Quintero, TPPF, Center for Local Governance (July, 2015)


Executive Summary

Texas cities practice involuntary annexation on a regular basis. Property owners and residents currently have no opportunity to consent to their annexation under the law, and challenging the decision is virtually impossible.

The history of Texas points to voluntary general law annexation via petition which is, to this day, the primary means of annexation for general law (also known as statutory) cities in Texas. Home rule cities have had the ability to involuntarily annex since the passage of the Home Rule Amendment to the Texas Constitution in 1912.

A series of abuses, particularly by the city of Houston, led to some limited reforms of involuntary annexation over the years. is includes the Municipal Annexation Act of 1963 that created the Extraterritorial Jurisdiction, and further reforms passed in the late 1990s after Houston’s controversial annexation of Kingwood.

In spite of these reforms, the practice of involuntary annexation is still the law in Texas. Property owners are regularly annexed without their consent, and many annexations, both large and small, continue to be controversial. In direct contrast to common assumptions that large-scale annexations are no longer happening in Texas, San Antonio recently began studying a massive 66-square-mile annexation that would add roughly 200,000 people to the city by 2020. The annexation would make San Antonio the fifth largest city in the nation.

Involuntary annexation has a number of potential downsides. It strikes a clear contrast with the history of the United States and our nation’s long deference to self-determination as being the ultimate cornerstone of governance. The Founding Fathers clearly envisioned a system in which individuals could choose which jurisdiction they wanted to live in, and in which the rights of the citizens were preserved above all else. Forced annexation could not be farther from the founding vision of protecting sovereign individuals’ rights from the power of government.

It also has questionable fiscal consequences. While municipalities often target areas for annexation based on the prospect of a more robust tax base, there are questions raised in scholarly studies about how viable many annexations are and what kinds of strains they place on service provision within municipalities. When cities expand, so too do their fiscal obligations— and the strains placed upon existing services, as well as the penchant to create more debt, are all too real.

Finally, involuntary annexation can have undesirable social consequences. Annexation rarely targets poor, low-income areas. Instead, most annexations are value plays, seeking to bring in the wealthiest properties that will expand the tax base the most. Lower-income communities may or may not want to be annexed, but they are clearly treated differently.

In light of these adverse effects of involuntary annexation, the Texas Legislature should enact reforms to require the consent of a majority of residents in order to annex.

For areas with a population of 200 or less, the process of annexing a community ought to be done by petition. For areas with a population size exceeding 200 persons, it should be accomplished via election held on a regularly scheduled election date. If residents don’t own a majority of the property in the area proposed for annexation, then property owners should also be petitioned. If a majority of property owners agree to the annexation, if necessary, and if consent is obtained from the qualified voters of the area to be annexed, then annexation should proceed in a quick fashion that is not delayed by unnecessary bureaucratic processes. In addition, voluntary annexation should be sped up by the allowance of agreements between cities and property owners to provide a certain level of services. Finally, citizens of the city initiating the annexation should have the option to reject the annexation if they can muster the signatures of 10 percent of the last municipal election’s vote total and vote to reject it in an election.

These are fair and equitable reforms that give cities a quicker, less bureaucratic annexation process, while giving residents the ability to consent to their future. Texans should not lag behind other states on the essential question of property rights. Now is the time for involuntary annexation reform.