The Woodlands, September 13 – The Woodlands Township Board of Directors moved into “uncharted territory” by failing to pass a property tax rate at its Special Meeting on Thursday, September 12, 2019. Board Vice Chairman John McMullan, who presided over the meeting in the absence of Board Chairman Gordy Bunch, made the “uncharted territory” comment after the Township Board was unable to adopt a tax rate on three separate votes during the meeting.
Montgomery County Tax Assessor-Collector Tammy McRae commented at the end of the meeting, “I’ve been in this business for 34 years and this is my first time to experience this.” The Township Board voted to meet again on September 18 at 6 p.m., the last date when the Township can join other Montgomery County taxing authorities in McRae’s unified tax bill. If the Township fails to set its tax rate by September 18, The Woodlands governmental entity will need to send property tax bills on its own.
The Board took three votes to try to set a tax rate. First, Director Ann Snyder moved to adopt the “effective tax rate,” the rate at 22.40 cents per $100 valuation which would not result in any increase in taxes for residents of The Woodlands. Director Bruce Rieser argued “we’re digging a hole. It’s going to be a tough road.” Snyder explained that she “carefully considered” her decision to change her vote to support the “effective tax rate.”
Of the three tax rates on which the Board voted, the 22.40 cents tax rate was the only one which would not require an increase in taxes. Therefore, it required only 4 of 6 of the votes in order to prevail. The 22.40 cents tax rate failed to prevail, however, on a 3 to 3 split vote, with Snyder, Carol Stromatt, and McMullan voting “yes” and Rieser, Brian Boniface, and John Brown voting “no.”
Andy DuBois, who is running for Position 7 on the Township in the November 5 General Election, told The Golden Hammer after the meeting, “Residents across Texas want property tax reform. The State Legislature delivered last session; and local governmental entities have responded by adopting a rate at or below the effective tax rate. I would expect the Township board to follow their lead. Adopting the effective tax rate would not affect amenities, services, or the annual budget.”
Brown then made a motion to adopt the current tax rate of 22.73 cents. Because that rate represents an increase in taxes, it required 5 votes to pass. It only garnered three votes: Brown, Snyder, and Rieser. McMullan, Stromatt, and Boniface voted “no.” On a 3 to 3 split vote, the motion to adopt a 22.73 cents tax increase of 2.86% failed.
Boniface then moved to adopt a 23.00 per $100 valuation tax rate and said, “We were elected to analyze our situation and make the right decisions for our community.” Boniface’s motion also required 5 votes, as it represented a larger tax increase. Boniface, Rieser, and Brown voted “yes,” while Stromatt, Snyder, and McMullan voted “no.” The motion failed.
The only matter on which the Board could agree with respect to the tax rate was to meet again on September 18 at 6 p.m.
The Board voted 5 to 1 to adopt a $130 million budget with $127 million of expenditures and $3 million of surplus. McMullan voted against the budget, because, he explained, he wanted the budget to include certain other items, such as a suicide prevention counselor, and also to include the increased swimming pool fees as a revenue item.
The budget represents a $3.5 million decrease in spending, representing a 2.7% reduction. The budget has a problem with it, however. It includes a $1.9 million capital reserve fund for debt reduction. Those funds come from the maintenance and operations side of the budget, not from the Debt Service part of the budget. Therefore, under Senate Bill 2, it’s unlikely the Township Board will be able to use those funds for the intended purpose of debt reduction. Elimination of that $1.9 million would provide the Township Board with most of the funds necessary to provide the effective tax rate rather than one of the higher tax rates some of the Board members have proposed.