As Indiana cities and towns more frequently experience fiscal pressures from declining general revenues and tax cap loss, many of them look to annexation as a way to expand their tax base to lower property tax rates on existing homeowners and business taxpayers, and to provide more dollars for the city or town.

Current annexation law requires a signature petition from objectors representing at least 65% of the landowners or 75% of the assessed value of the proposed area to file in court for review of the annexation. This threshold is higher than any other citizen petition required in Indiana law, and provides no assurance that the annexation will be stopped.

Most proposed annexations are promoted with inadequate fiscal plans that lack detail about services to be provided. Additionally, most plans do not include specifics about how tax burdens will change for those being annexed. Annexation is also a way for municipalities to expand their “two-mile fringe” zoning area beyond that originally approved by the county commissioners. Landowners subjected to annexation proposals need more information and more effective ways to stop unwanted movement of city and town boundaries.

The Local Government and Fiscal Policy Advisory Group is a formal group of Indiana Farm Bureau members that meet to discuss issues relating to the local government and finance issues in Indiana. They make policy recommendations and provide guidance for legislative issues.