Resumen de Border Wars: Tax Revenues, Annexation,and Urban Growth in Phoenix

Carol Heim

• Phoenix and neighboring municipalities, like many in the South and West, pursued agrowth strategy based on annexation in the decades after the second world war. Thisarticle explores the link between annexation and competition for tax revenues. Afterdiscussing arguments for annexation, it traces the history of annexation in the Phoenixmetropolitan area. A long-running series of ‘border wars’entailed litigation, pre-emptiveannexations and considerable intergovernmental conflict. The article argues that taxrevenues have been a key motivation for municipalities to seek annexation, particularlysince the 1970s. The timing of annexation was an important component of the strategiesof municipal officials. Developers sought urban economic growth, but did not alwaysfavor political expansion of municipal boundaries through annexation. The article thenconsiders several related policy issues and argues that while opportunities for annexationare becoming more limited, competition for tax revenues (particularly sales-tax revenues)continues to be fierce, creating dilemmas for municipalities in the region.