The Woodlands, August 29 – The Woodlands Township Board of Directors felt some pushback yesterday afternoon, Wednesday, August 28, 2019, over the proposed property tax rate increase the Board tentatively recommended on August 15. Specifically, Director Ann Snyder and a few citizens who spoke urged the Board to adopt the “effective tax rate” of $0.2240 per $100 valuation rather than the proposed increase to $0.2300 from the current property tax rate of $0.2273 per $100 valuation.
The Township staff made a budget presentation explaining the Township facing a $1.0 million decline in sales tax revenue, a $1.6 million increase in the Waste Management solid waste disposal contract, and a $1.1 million in streetscape maintenance during Fiscal Year 2020, which begins October 1, 2019. The staff also explained that, while a tax increase would not be necessary for Fiscal Year 2020, there is a concern that there will be a deficit in funding beginning Fiscal Year 2021, so the staff has recommended building additional cash reserves beyond the $89,279,795, the Township has already accumulated. The total annual FY2020 Budget is $127,012,125, but that includes almost $3 million in surplus cash the Township Board would accumulate.
The “effective tax rate” is the tax rate at which property tax payers would be the same amount of taxes next year as the current tax year given property tax appraisal increases. Property tax appraisals increase a little over 1% in The Woodlands, so the “effective tax rate,” the adoption of which would not result in a tax increase for residents of The Woodlands is $0.2240 per $100 valuation and is actually a bit lower than the property tax rate of $0.2273 per $100 valuation.
Snyder, who supported the recommended Budget, which the Township Board approved on August 15, remarked during the public hearing that she “felt we were a little high” with respect to the tax rate. Director John McMullan had urged the Board to adopt an “effective tax rate” of 0.2240 per $100 valuation, while Director John Brown had recommended the Township keep its $0.2273 per $100 valuation rate in place through the coming Fiscal Year.
Snyder explained, “I want to advise the Board that I will be supporting the ‘effective tax rate’ when we finally vote on the Budget on September 12.”
Township Board Chairman Gordy Bunch, a renowned businessman in the field of insurance, expressed his concern that “we need funds to prepare for the 2021 negative balance…I have a problem ending the budget showing we’ll be in a deficit situation next year.”
A private citizen that made the following comment during the public hearing:
“I’m a private citizen and cult member from Sterling Ridge.
“In The Woodlands Township, we’re fortunate to have an exemplary Board of Directors that is head and shoulders above your peers in neighboring municipalities in your intellect and your desire to do right by this very cohesive community.
“You’ve proposed a 0.23 tax rate. I consider that a major tax increase.
“We continue to suffer property tax appraisal increases, which countywide have been 6.73% this year and 1% in The Woodlands, according to the staff presentation we just heard.
“As a result, the effective tax rate, the rate at which our taxes would stay the same is 0.2240. That’s the rate you should adopt for two major reasons.
“First, you’re a conservative board. You understand that giant difference which has occurred in most of our lives.
“In 1979, taxation was 17% of disposable income. In 2019, taxation is 52% of disposable income. Most of the growth has been local and state taxes. It’s become a societal problem, because it’s the reason both parents must now work outside the home.
– that puts enormous stress on the family
– that puts enormous stress on public schools which must try to educate children who have not benefitted from a parent’s full-time nurturing during the first 5 years of life
– it’s an upward spiral necessitating greater government spending on schools, mental health, law enforcement and criminal justice, and many other areas
“Second, our community is taking a serious look at incorporation of The Woodlands into a municipality. At this point, I’m ambivalent on that issue. As some of you may know, I’m concerned about a proliferation of ordinances. But I’m also concerned about the cost.
“I want our community to have our own identity and self-determination, however. One of the arguments for incorporation has been to get away from control of a Montgomery County Commissioners Court which can’t control spending, taxes, or ethics.
“In order to support incorporation, I have to trust our leadership in The Woodlands that we’re not headed towards becoming the City Hall of Chicago. Right now, you don’t have anything close to the difficulties you’ll face as a city council running a city.
“This year, the County government brought in a budget right at the effective tax rate. This year, thanks to conservative leaders such as Jon Bouche, Brian Boniface, and Kelli Cook, they even got CISD to pass a tax rate close to the effective rate.
“If you can’t bring our taxes in at the effective tax rate, however, with all of the talent on this Board, then I don’t see how you can seriously make our community believe that a municipality would ever have the ability to control spending.”
Enrique Rosero commented “I don’t like a tax rate increase.”
Mark Unman expressed a concern that “we can’t always cover increased expenses all the time with increased taxes.”
Bunch indicated he would consider adoption of the effective tax rate despite the looming deficit in the next year’s budget. He noted that tax rates for the Woodlands Township have actually gone down during the past six years. Clearly, Bunch and the conservative majority on the Township Board have carefully managed tax rates to keep them as close as possible to the “effective tax rate” each year, so that residents would not suffer tax increases.
Bunch also noted that many municipalities charge the 3.5 cents of the tax rate representing the Waste Management contract as an extra fee for homeowners and businesses.
The Board will conduct another public hearing on September 4, 2019, at 6 p.m.
The Board will take its final vote on the Budget at a Board meeting on September 12, 2019, at 6 p.m.