Flower Mound officials warn of budget crisis due to potential revenue cap decreases

Flower Mound's Town Council is bracing for significant financial challenges as discussions about the upcoming fiscal year 2027 budget reveal potential constraints on municipal funding. During a recent work session, officials highlighted the pressing need for budgetary adjustments in light of new legislative measures that could drastically reduce revenue caps for municipalities.

Town Manager James communicated a stark reality: the current budget may be the last that can be maintained without seeking voter approval for a tax rate increase, known as a VADER election. This follows the Texas legislature's introduction of a 3.5% revenue cap in 2019, which has already forced municipalities like Flower Mound to tighten their budgets. With a proposed reduction to a 2.5% cap on the horizon, the town could face severe cuts to essential services or the necessity of a voter referendum as early as next year.

The council is preparing for these challenges by initiating discussions on the fiscal year 2027 budget as soon as the current budget is passed. This proactive approach aims to assess service levels and identify areas for potential cuts or reallocations. The town's leadership emphasized the importance of transparency and community engagement in this process, ensuring that council members are equipped with the necessary information to make informed decisions.

Additionally, the council is closely monitoring several legislative bills that could further impact the town's financial stability. These bills, particularly Senate Bill 10 and House Bills 73 and 46, are expected to shift budgeting practices and could have detrimental effects on the town's enterprise and utility funds.

As Flower Mound navigates these financial uncertainties, the council remains committed to maintaining quality services while adapting to the evolving fiscal landscape. The upcoming months will be critical as they work to balance the budget and prepare for potential voter engagement regarding tax rate adjustments.