Conroe City Council voted Aug. 13 to propose a property tax rate of $0.5069 per $100 valuation, giving the city flexibility as officials continue working through the fiscal year 2026-27 budget.
The rate is the city's voter-approval rate, or the highest rate council could later adopt without triggering an automatic election. It does not mean the city has adopted that rate.
Council can still approve a lower rate, including the current $0.4272 rate, but cannot go higher than the rate proposed Aug. 13. The no-new-revenue rate is $0.4270.
The details
Council member David Hairel raised the possibility of proposing the higher rate while the city continues evaluating public safety spending.
"I don't think there's consensus or even a thought of raising taxes," Hairel said, adding that the city could need additional flexibility depending on the police department's needs.
Finance staff recommended proposing the voter-approval rate for now.
"I recommend we go with the voter approval ... and then y'all have room in case something changes," Chief Financial Officer Ariel Khanh Gibbs said. "On the adoption day, y'all can vote for 42 cents if you want."
A closer look
The city's updated FY 2026-27 proposal now includes about $369.2 million in gross revenue and $363.6 million in expenditures, down about $1.1 million from the expenditure proposal presented during the July 27 budget workshop.
Property tax revenue projections also fell by about $2.3 million. Staff attributed the decrease largely to a certified taxable value of roughly $16.46 billion, below the approximately $17 billion preliminary estimate, along with additional exemptions and property value protests.
Other revisions include keeping rates unchanged for Lifeline utility customers, a discount rate program for seniors aged 65 and over as well as disabled residents, increasing the proposed employee cost-of-living adjustment from 3.5% to 4%, adding $100,000 for a compensation study, and increasing legal expenses by about $200,000. Street maintenance was reduced by $500,000.
What else?
The updated capital plan also adds a $4.8 million Tanglewood street rehabilitation project and about $1.1 million for a Main Street water line project. The city also learned it would not receive a previously anticipated $5 million congressional grant tied to Water Well No. 18 at Carl Barton Jr. Park, increasing proposed water and sewer debt.
Council members also discussed potentially using fund balance instead of issuing about $1.45 million in additional general government debt. Gibbs said doing so would not significantly affect the city's reserves.
More changes could still come. Hairel said the city "really desperately" needs to increase its police force and requested a future presentation on additional officers and public safety staffing.
He also asked that staffing a fourth firefighter on three fire trucks be considered.
Stay tuned
Council is scheduled to hold a public hearing on the budget Aug. 27 and adopt the budget and final tax rate Sept. 10. The new fiscal year begins Oct. 1.
