Woodlands board reviews 2026 budget framework, weighs tax-rate choices and rising public-safety costs

Monique Sharp, president and CEO of The Woodlands Township, opened Budget Workshop No. 1 with an overview of the proposed 2026 consolidated budget and the calendar for setting a proposed tax rate ahead of a Sept. 5 adoption vote. Sharp said the township’s current tax rate is 17.14¢ per $100 of valuation, the no-new-revenue rate is 16.03¢, and the voter-approval rate is 18.89¢; she emphasized that a board vote this week would set a proposed rate for public-notice purposes, not the adopted rate.

Sharp presented 2026 base-budget projections of roughly $175 million in operating revenues, with sales and use tax estimated at about $81 million (47% of revenues) and property tax comprising roughly 30%. She outlined scenarios showing that adopting the no-new-revenue rate would reduce township revenues by about $3.3 million; for a $500,000 home, that scenario was modeled as a roughly $53 annual saving for the owner. Sharp also noted the township’s projected undesignated fund balance would be about $655,000 under the base budget, and that using the no-new-revenue rate would create a larger shortfall that would require further budget reductions or other offsets.

Sharp flagged revenue risks and concentrations: one manufacturing taxpayer accounts for an outsized share of manufacturing-related sales-tax growth, and interest income — previously an occasional source of one-time funds — is declining as interest rates drop. She also outlined hotel-occupancy and mixed-beverage tax receipts: hotel tax is projected at about $10.7 million, including a 2% supplemental hotel tax dedicated to Visit The Woodlands; mixed-beverage tax now brings roughly $1.5 million to the township following 2023 legislation.

On personnel, staff proposed a 3.5% general wage increase for eligible employees, two modest new positions as part of the base budget (a radio analyst in IT and one streetscape position), and continued funding for health insurance increases (budgeted at 7.5% for the township). Sharp reported general-employee FTEs at about 438.7 for 2026 and noted the fire department’s proposed FTE increase of one position (to 193) for a fleet technician; the net base-budget FTE change was effectively zero. Retirement costs were described as $2.3 million a year for general employees (defined-contribution plan with a 2-for-1 match up to a 14% cap) and about $3.0 million for the fire department’s pension plan.

Public-safety costs were a central focus. Sharp summarized a county-level pay-parity proposal presented to Montgomery County Commissioners Court that would raise deputy/detective pay across a four-year plan; Sharp said the township’s portion of law-enforcement pay-parity cost is modeled at roughly $1.1 million for contracted pay parity and will require multi-year planning. Fire leaders explained that rising call volume, traffic delays and higher costs for apparatus and maintenance are already putting pressure on response times (Sharp/chiefs cited an average response time near 6:14) and that a fleet technician position is needed to reduce costly outsourcing and minimize vehicle downtime.

Board members debated priorities and trade-offs throughout the presentation. Directors asked staff to clarify where one-time versus ongoing funds were used, whether hotel-tax reserves could be redirected for certain capital needs, and how much of the budget is driven by contracted services. Several directors questioned the cost-effectiveness and public-safety value of the township-funded mounted patrol contract (Alpha and Omega), which staff said costs about $1.5 million a year and whose current contract term runs through 2027; some board members described the mounted patrol as a community amenity and deterrent, others said those funds might be better used for sworn law enforcement or fire staffing.

Capital and reserve policies received detailed attention. Sharp said the township funds nearly all capital projects (about 97%) from the capital replacement reserve (currently projected near $28.7 million entering 2026) and described major upcoming items — vehicle replacements, park renovations (including Alden Bridge Sports Park), upgrades to Town Hall HVAC and continuing waterway and elevator repairs in Town Center. Two elevators were identified as replacement candidates in the near term (one line item cited at roughly $410,000). Sharp also reviewed debt-service schedules, noted convention-center bonds that will be paid off in coming years, and underscored bond-covenant and statutory restrictions on some reserves. The hotel-occupancy-tax reserve was called out as an economic-development fund that could be used for one-time projects; Sharp estimated it could reach about $12 million by 2026 if not spent.

Formal actions taken during the meeting included adoption of the workshop agenda (motion by Director Franks, second by Director Heiser; voice vote) and acceptance of the certified tax-rate worksheets prepared by the Montgomery County Tax Assessor’s office (motion moved and seconded; voice vote). The board also approved a motion directing staff to perform additional research before the next budget-initiative session.

What’s next: staff will return with further analysis and budget-initiative proposals at the next workshop; the board is scheduled to vote on a proposed tax rate and later to adopt the 2026 budget and tax rate following required public notices and hearings. The meeting recessed for a brief executive session earlier in the morning and adjourned at noon.