One-year pause on city annexation now in effect
Senate Bill 141, a measure to place a temporary pause on city annexation in Kentucky, became law this week after receiving bipartisan support from the General Assembly. The law took effect March 29 without the signature of Gov. Andy Beshear.
The Legislative Research Commission will establish a task force as outlined in SB 141 to examine the effects of city annexation and make recommendations for potential law changes.
“County governments across the state worked tirelessly to engage with lawmakers throughout the 2023 session, describing the impact unchecked annexation can make on county budgets and the services provided to residents, businesses and workers in their community,” said Jim Henderson, executive director of the Kentucky Association of Counties (KACo).
“KACo and its members appreciate the legislature starting the conversation about this important issue. We look forward to working with our colleagues in city government to develop long-term solutions on annexation that support economic development and quality of life for all Kentuckians.”
Annexation is used to expand a city’s geographic boundary. When a city and county both levy the same type of taxes, the county revenue must be credited against the city revenue generated in that area. (This crediting can vary based on county population.) City annexation can strip a county of its revenue base, yet the county is still bound to provide Constitutionally-mandated services for the entire county, including inside city limits.
The pause on city annexation is in effect through June 30, 2024, however, annexation can still take place under several circumstances, including for major economic development projects, annexations requested by a property owner, annexations in which the county and city agree, and more.
A timeline for the legislative task force on annexation has not been announced, but its work must be completed by Nov. 1 of this year.
KACo will host a virtual briefing about annexation for its members at 2 p.m. EDT, Wednesday, April 5. Members can register for the meeting here.
A list of frequently asked questions county officials may have about SB 141 is available here.