Annexation

Overview: annexation law and policy in Wisconsin

Many wars have been waged throughout history over the ownership of land and self-governance, and several of these conflicts have involved competing nations, armed with a vast array of troops and destructive weaponry. Similar conflicts also occur at the local level on a daily basis. Although these conflicts do not involve troops or weapons, they are often equally as volatile and contentious as the conflicts that occur on a larger scale. The cause of this strife is the issue of annexation and the imbalance of power between Wisconsin’s local government family — towns, cities and villages.

Because annexations have a significant impact on the rights of individual landowners and developers, REALTORS® should have a general understanding of the related issues and proposed solutions. This webpage provides a brief overview of some legal and policy issues related to annexations.

What is annexation?

Generally speaking, “annexation” is the process used by cities and villages to increase their size through the acquisition of additional land. In most cases, the land in which the city or village seeks to acquire is contiguous to the city’s or village’s existing boundaries but currently sits within a neighboring town’s jurisdiction. Once a city or village annexes land, the city or village is required to extend public services to the citizens of an annexed area, such as providing police and fire protection and issuing appropriate licenses and permits to qualified residents.

Why do cities annex land?

The primary reason cities annex land is to increase their tax base. Because property taxes are the primary source of revenue for local governments, cities and villages have a strong financial incentive to expand their boundaries. By increasing its tax base, a city or village will have greater bonding capacity due to its increased valuation. In addition to financial benefits, annexation increases the size and population of a city or village, which allows it to raise its level of political influence, its prestige, and its ability to attract desirable commercial development.

What are the types of annexation?

As outlined in Wis. Stat. § 66.0217, there are three common methods that a city or village can use to annex town lands: direct annexation, annexation by referendum, and annexation of certain town islands. 

  • Direct annexation by unanimous approval (66.0217(2)): If a petition for direct annexation is signed by all the electors residing in the territory and the owners of all the real property in the territory, an annexation for the property may be enacted by a two-thirds vote of the elected members of the governing body of the city or village without compliance with the notice requirements. No territory may be annexed under this section unless contiguous with the city or village.
  • Annexation by referendum (66.0217(3)(b)): A petition for a referendum on the question of annexation may be filed with the city or village clerk signed by a number of qualified electors residing in the territory equal to at least 20% of the votes cast for governor in the territory in the last gubernatorial election and the owners of at least 50% of the real property area or assessed value.
  • Annexation of town islands (66.0221(1)): By two-thirds vote, a city may enact an ordinance annexing territory that comprises a portion of a town and that was completely surrounded by territory of the city. This subsection does not apply to land owned by a town government that has existing town government buildings located on the land. No town island may be annexed under this subsection if the island consists of over 65 acres or 100 residents.

How does the annexation process work?

The process is generally triggered by a city or village after determining that it needs to acquire more land in order to expand its economic base. However, in many cases, the process is triggered by a landowner or developer who wants to either connect to municipal sewer or develop the land at a higher density than permitted by the town or county.

After determining the land it would like to annex, the city or village must go through a series of procedural hoops, including: 

  • Notice of proposed annexation (66.0217(4)(a)(1)-(6): The notice shall contain:
    • A statement of intention to circulate an annexation petition. 
    • A legal description of the territory proposed to be annexed.
    • The name of the city or village to which the annexation is proposed.
    • The name of the town from which the territory is proposed to be detached.
    • The name and post office address of the person causing the notice to be published who shall be an elector or owner in the area proposed to be annexed.
    • A statement that a copy of the scale map may be inspected at the office of the town clerk for the territory proposed to be annexed and the office of the city or village clerk for the city or village to which the territory is proposed to be annexed.
  • Annexations within populous counties (66.0217(6)(a)): No annexation proceeding within a county having a population of 50,000 or more is valid unless the person publishing a notice of annexation mails a copy of the notice to the clerk of each municipality affected and the Wisconsin Department of Administration. The department will determine whether the annexation is in the public interest.
  • Actions to contest annexation (66.0217(11)(b): An action contesting an annexation shall be given preference in the circuit court. The court and parties are encouraged to consider the application the alternative dispute resolution statute, 802.12, to an action contesting an annexation.
  • Limitations on annexation authority (66.0217(14)(b)(1): No territory may be annexed by a city or village under this section if no part of the city or village is located in the same county as the territory that is subject to the proposed annexation unless one of the following applies:
    • (a) The town board adopts a resolution approving the proposed annexation.
    • (b) The annexation is by unanimous approval.

    Each of these requirements has a specific time frame and format, which are strictly interpreted by Wisconsin courts. If a city or village misses a deadline or fails to meet the substantive requirements for notice or obtaining signatures, it must start the annexation process over.

    Pros and cons of annexation

    During the course of any annexation attempt, both pro and con arguments invariably surface. Some are based on fiscal policy, such as, “the annexing city can provide additional services to the new area.” Others arguments are based on an effort to maintain the status quo, such as, “the community to be annexed may lose its individuality and rural character.”

    The following list of arguments may help REALTORS® when assisting clients during annexation proceedings. Please note, however, the validity of these arguments will depend on the underlying facts surrounding each situation and, therefore, should be carefully considered.

    Advantages of annexation

    • Availability of additional services, such as sewer, water, ambulance, mass transit and snow removal.
    • Increased real estate values and marketability as more improvements and urban utilities are made available.
    • Provides suburban residents with a voice in the government of the larger community in which they live. Town residents can be substantially affected by the actions of large, neighboring cities, but they are unable to participate in its affairs.
    • Reduces utility rates, since utility surcharges to unincorporated territory, if applicable, would be lifted.

    Disadvantages of annexation

    • Increase in taxes, due to an increase in services that some residents do not want.
    • Greater urbanization and loss of “rural character.”
    • More restrictive ordinances, regulations and licensing requirements.
    • Will become part of a large bureaucracy that is less accessible to the people.

    Why is annexation such a big problem?

    Originally, the town form of government was established to provide a minimal level of services for residents within rural areas. If a city or village needed to expand its boundaries, the city or village virtually had free reign to annex as much town land as desired. However, in recent years, towns have become more populated and have established more advanced forms of government. In fact, many towns throughout the state have a bigger population and greater tax base, and they provide more services to their residents than neighboring villages.

    As towns have become larger and more sophisticated over the years, so too has their frustration with current annexation laws. Towns believe that cities and villages have too much authority to annex town land, which prevents towns from planning for the future. Many towns are unwilling to engage in planning or provide services for town residents, fearing that an annexation will undermine these efforts. Finally, towns, like cities and villages, rely on property taxes as their principal source of revenue. Therefore, when a city or village annexes town land, a portion of the town’s tax base is eliminated.  

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