The Folly of Woodlands Incorporation, Part 6: If Woodlands incorporates as a city government, residents will lose chance to enjoy property tax homestead exemption

The Folly of Woodlands Incorporation, Part 6: If Woodlands incorporates as a city government, residents will lose chance to enjoy property tax homestead exemption

Image: Woodlands Township Gordy Bunch made clear to the Woodlands community at the Thursday, October 21, 2021, Board of Directors meeting that, with incorporation, a homestead exemption for property taxes is “fiscally impossible.”

The Golden Hammer Staff Reports

The Woodlands, October 25 – What has become very clear is that if Woodlands residents are able to fend off incorporation as a city government in the November 2, 2021, referendum, they will have an opportunity to get a twenty percent (20%) homestead exemption, which Township Chairman Gordy Bunch and his allies have denied them as “fiscally impossible” due to the massively growing tax dollar spending requirements of the proposed city government. Bunch made those remarks during the Thursday, October 21, 2021, Township Board of Directors meeting after the Board’s fiscal conservative leader, Dr. Ann Snyder, raised the homestead exemption during Bunch’s attempted pro-incorporation campaign advertisement during the meeting.

Assistant General Manager Monique Sharp admitted, in response to questioning by Dr. Snyder, that a 20% homestead exemption would result in $7.1 million in “lost revenue,” a euphemism for lower taxes, to a city of The Woodlands. Sharp further admitted “our current five year plan doesn’t support that. We’d be in the hole.”

Bunch, in the midst of making campaign arguments in the Board of Directors meeting, said “the last time we seriously looked at this [a homestead exemption] was around 2015,” which is an important date because that preceded the time period when the pro-incorporation Bunch began as Township Chairman to sock away $30 million in overtaxation of residents to pay for his incorporation as a city government dream.

Snyder corrected Bunch and noted that the Board, under Bunch’s direction, voted down a proposed 20% homestead exemption in 2017, after the Montgomery County government had adopted a 20% homestead exemption earlier that year in order to give taxpayers a substantial property tax break.

In 2017, conservative political activist Kelli Ann Cox raised the homestead exemption with the Montgomery County Commissioners Court. After Cox argued openly for the adoption of a 20% exemption, Precinct 3 Montgomery County Commissioner James Noack put the item on the agenda. The County government adopted a 20% homestead exemption on March 28, 2017, on a 3 (Noack, Clark, Riley) to 2 (Doyal, Meador) vote. The County government chose to forego $28 million in tax collections to give taxpayers a break on that occasion.

Bunch’s and the Township’s financial model for incorporation as a city government, however, is so fragile that Sharp, the Assistant General Manager, made clear that the proposed city government could not afford to give Woodlands residents a 20% break on their homesteads, even though that would cost the proposed city less than one-quarter of the taxes the County government forewent.

What Bunch and Sharp made clear during the October 21 Board meeting is that Woodlands residents would pay a hefty price for incorporation of The Woodlands as a city. Not only will taxes rise immediately by $16.4 million in the first year after incorporation but also Woodlands residents will never get the 20% homestead exemption the County government, school districts, and many municipal utility districts have allowed.

What Bunch and Sharp made clear during the October 21 Board meeting is that Woodlands residents would pay a hefty price for incorporation of The Woodlands as a city. Not only will taxes rise immediately by $16.4 million in the first year after incorporation but also Woodlands residents will never get the 20% homestead exemption the County government, school districts, and many municipal utility districts have allowed.

Additionally, Sharp and Bunch made clear that Township property taxes will continue to increase every year by at least 1.75% after incorporation by including in their financial model that property tax appraisal values will increase by that amount (or else they’ll have to raise the property taxes by a tax rate increase).

Sharp falsely stated during the October 21 meeting that the Township Board has “always adopted a tax rate below the No New Revenue, or Effective Tax, Rate.” In fact, the Township Board just adopted a tax rate above the No New Revenue Tax Rate. According to Montgomery County Tax Assessor-Collector Tammy McRae, the No New Revenue Tax Rate for the Woodlands Township for Fiscal Year 2022, which began on October 1, 2021, is 21.69 cents per $100 valuation. The Township Board, however, adopted a 22.31 cent tax rate, which constitutes a 2.9% tax increase on Woodlands residents.

 

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