Karla Bowsher and Crystal Franks, Chronicle-Tribune
Marion Mayor Wayne Seybold will propose the annexation of 15 different parcels Tuesday during Marion City Council meeting.
The council will have the first reading of the ordinances, annexing certain territories to the City of Marion, at 7 p.m. at City Hall.
According to Tuesday's agenda, the territories include properties on:
`Shady Hills and Rolling Hills
`River to Pennsylvania Street
`Meridian and State Road 15
The number of specific households affected by the annexation was not available as of Saturday evening.
Member Joselyn Whitticker, D-At large, said the city needs to look if the proposal is fiscally sound.
"Before we try to annex we need to see what city services are offered to those parcels," she said. "I think we need to hear from those citizens. We need to go gradually on that. We need to talk about pros and cons even before we go to a first reading. (Seybold) is going to talk about growth and industry. They should know the total number of people, who already receive services and who do not. There should be round table discussions before this was a table item."
Annexation requires all parcels to receive city services like water and sewage.
Fred Troxell, D-Ward 1, said he doesn't think the city has the money to provide the protection required.
"This came as a surprise to me," he said. "It won't work. State law sees any annexation at the end of five years must have all the protection. I can't believe that they would try this. This absolutely blows my mind. (Seybold) is looking to generate more money. All they were thinking about was the tax money coming in. I wouldn't be surprised if they don't take a suspension of the rules."
Government consultant Darren Bates, president of Data Pit Stop, said the annexations wouldn't necessarily increase the city's tax base because of property tax caps.
Also known as circuit breaker credits, property tax caps were added to the state constitution several years ago to protect taxpayers from rising tax rates by limiting how much local governments can collect in property taxes.
The city of Marion has hit tax caps the past couple of years, meaning the city has been unable to collect as much money in property taxes as was billed for. This year, for example, Marion is expected to lose out on about $1.7 million in property tax revenue due to tax caps, according to projections from the state.
If the city did gain property tax revenue through the annexations, it would be at the expense of other local governments that serve the annexed areas, Bates said.
In other words, other municipalities that get a portion of property taxes generated in the annexed areas — schools, libraries, townships and county government — would get a smaller cut of property tax revenue.
"Most of Marion is hitting tax caps. They have massive tax cap losses. For Marion to annex any more is literally just stealing money away from the county and the schools because there's no more money to be made," Bates said. "The only place to get the money is to pull it away from other governments."
Marion is not the first municipality to try to build its tax base through annexation, and it would not be the first to complete such an annexation.
"The state is aware of this. This is a growing dilemma they are aware of, and they're not sure how to handle it at a state level," Bates said. "We are a house of cards in Indiana that one of these days is going to collapse because no one is trying to fix the problems."
The city of Huntington, which Bates works with, nixed its plans to annex land in five phases over three to four years, he said. Property owners that would have been affected had staked signs reading "No Force Annexation" into their yards, and city council meetings had standing room only.
"When the people found out it was going to steal money away from Huntington School Corp.," Bates said, "they literally voted all phases down, killed them, over, they don't exist anymore."
Tax revenue isn't the only thing other local governments lose through annexation, however.
By annexing residential areas, Marion would also increase its population, which would give more weight to city officials' votes on the county tax board. The city would therefore have better odds of, for example, increasing income taxes countywide.
"It doesn't surprise me, as bad as Marion is hurting for money," Bates said.
Also on the agenda Tuesday is a request from the city administration for the city council to adopt a tax anticipation warrant for 2015. This type of short-term loan would give the city millions of dollars at the start of the year to make it to the first property taxes distribution of the year, usually in May or June.
The administration has asked the council to adopt at least one such short-term loan per year for several years now.
Seybold and Grant County Council President Jim McWhirt were unavailable for comment.