Is annexation a money maker for Jefferson City?
In last annexation, city incurred some expense, benefit
Sunday, December 4, 2011
As the city looks at possible areas to annex in the near future, some observers have said the end goal is increased tax revenues for the city. But what are city costs compared to new revenues through annexation?
Nathan Nickolaus, interim city administrator and city counselor, said the city does not bring in the funds people may imagine from annexation. He said property tax revenues do increase when areas are annexed into the city, but that only makes up a small portion of city revenue.
Plus, he said, the city has to expend more money once a neighborhood or area is annexed through regular maintenance and any other projects needed to bring the area up to city standards. Infrastructure, especially roads, are the largest portion of that expense, Nickolaus said. Standards for road construction are often stricter within cities as opposed to counties, which is the case in Jefferson City.
“Annexing existing neighborhoods is not a money maker,” he said. “I would say it’s a break even at best. If not that, we lose money on it.”
Jefferson City officials are in the process of selecting a possible area of annexation on the western end of the city.
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Jefferson City officials are reviewing possible areas of annexation on the western end of the city. City officials acknowledge the chief motivation is to bring in the Hampton Inn and Comfort Suites so they would be paying the city’s lodging tax. Should the city annex this area into the city?