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Indiana annexation bill rehashes state versus local government power struggle



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Mayor John Hamilton speaks April 3 at a Bloomington City Council meeting in City Hall.A bill requiring majority approval from residents and businesses in proposed annexed areas before annexation can begin was approved last month by the Indiana Senate. IDS file photo

A bill approved by the Indiana Senate last month rehashes a state versus local government power struggle that’s been developing since 2017. The bill would require majority approval from residents and businesses in proposed annexed areas before annexation can begin.

The bill was first read to the Indiana House Feb. 4.

The bill laid out the new procedure for annexation, a legal process that allows a city or town to add land to its boundaries, Republican Sen. Rick Niemeyer said. Niemeyer, the author of the bill, said it requires a majority approval from affected residents and businesses before annexation can occur. 

The bill also eliminates the remonstrance procedure, which allowed annexed areas to opt out of annexations if enough signatures were gathered.

“When they start jumping two and three miles annexing ground, those people sometimes don't have any say,” Niemeyer said of the current process.

Niemeyer said the bill is meant to protect people who made the decision to live outside a city’s boundary for whatever reason, such as avoiding paying for services they may already have.

Bloomington began efforts to annex about 10,000 acres in Feb. 2017. Of the nine areas the city was trying to annex, three were physically inside city limits but not incorporated already and one was struck from consideration after a petition signed by area residents was presented to Bloomington City Council. There were also months of public meetings and outreach. 

The city stopped trying to annex the eight areas in April 2017 due to a last-minute addition to Indiana’s budget bill. The clause terminated all annexations made after Dec. 31, 2016, and before July 1, 2017, and blocked new proposals until 2022, according to court documents.

This addition and quick turnaround was the basis for the city’s lawsuit against Gov. Eric Holcomb, which was filed in May of that year. The lawsuit alleged the legislation specifically targeted Bloomington because it was the only city moving forward with annexation at the time, according to court documents. 

After months of back-and-forth from the local and state government, Judge Frank Nardi of Monroe Circuit Court 6 ruled in favor of Bloomington in April 2019. 

Holcomb’s legal team tried multiple times to dismiss the lawsuit, arguing the governor was the wrong party to sue. Nardi ruled the legislation was unconstitutional and targeted Bloomington specifically, according to court documents. 

Holcomb’s team appealed the decision, bringing it to the Indiana Supreme Court. The court heard both sides’ arguments Jan. 9 and said it will discuss and have an answer in due course, according to court video. 

Sen. Mark Stoops, D-Bloomington, said the 2020 bill is much more broad and affects any local government trying to annex, which is a contrast from the legislation specifically targeting Bloomington in 2017. 

“That's going to be a high bar to reach,” he said. “I definitely object to the way the legislature uses their power to just stomp on some local governments legal ability to annex.”

It’s better to sometimes annex in pieces and focus first on areas inside the city, Stoops said. Bloomington attempted to annex large swaths of land, and that’s where the city ran into problems. Annexation typically leads to higher property taxes, and many property owners don’t want to be annexed, unless they need services which being a part of the city would bring. 

“Annexation is always complicated,” Stoops said. 

Paul Helmke, former mayor of Fort Wayne, Indiana, said annexation can be a good thing because it can help better reflect the economic and demographics of a city. 

“Republicans supposedly believe in local control,” Helmke said. “What they’re saying here is the government is best closest to the people, unless we disagree with it.”

Helmke said the lawsuit gets at the heart of whether local governments can actually govern themselves without the state or other entities stepping in. 

“Who do we want making our decisions?” he said. “The state government in Indianapolis, or folks at the local level?”

The bill would change the annexation process from one where residents and business owners opt in rather than out. The bill will be heard and reviewed by the House Committee on Local Government.

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