Conroe raises taxes to boost city salaries

*All rates are per $100 valuation.

*All rates are per $100 valuation.

Image description
Conroe raises taxes to boost city salaries
Image description
Conroe raises taxes to boost city salaries
Image description
Conroe raises taxes to boost city salaries
Updated 8:50 a.m. Sept. 23: Resident John Nicks was originally incorrectly spelled John Nix.

Montgomery County entities are deciding tax rates this budget season after a state bill passed this summer that could limit future tax rate growth.

Senate Bill 2, a property tax reform bill signed by the governor in June, limits the annual growth rate of cities’ and counties’ maintenance and operations revenue to a maximum increase of 3.5% from the previous year—unless voters approve a higher rate.

Ahead of next year’s lower rollback rate, the city raised its property tax Aug. 28 from $0.4175 to $0.4375 per $100 valuation in a 4-1 vote, with Mayor Pro Tem Duke Coon dissenting. The $0.02 increase is less than the city’s initial proposal of $0.4454 per $100 valuation—which would have been the full increase allowed.

City officials said the increase will bring an extra $2.3 million to Conroe—critical to staff salary needs.

“A lot of cities are proposing going up to the max this year because you’re going to be capped next year,” Conroe Chief Financial Officer Steve Williams said. “In the Austin area, in the [Dallas] metroplex—I’ve just seen a lot.”

Increasing property taxes

Officials said the result will be a $61 annual increase in property taxes paid on a $300,000 home starting
Oct. 1, the beginning of Conroe’s new fiscal year. However, the property tax rate is frozen for people who are over age 65, who are disabled or who have homestead exemptions.

Aside from property taxes, sales tax revenue is Conroe’s other major funding source, but those revenues dropped in FY 2018-19, with sales tax generating $102,000 less than in FY 2017-18. At the Aug. 19 public hearing, Conroe City Administrator Paul Virgadamo said Conroe is a sales tax-driven city, and staff is concerned about the decline over the past six months.

“There are houses coming on the ground, but until we get a lot more on the ground, you can’t depend on the capital side of things at the $0.4175 [2018-19 property tax rate],” Virgadamo said. “We [also] need to be prepared for the 3.5% rollback next year. We don’t know what that’s going to do to us from a revenue standpoint, or even the ability to even think about raising the tax rate next year.”

Mayor Toby Powell said the council must do what is best for residents.

“It’s not just on a whim and a thought. … I hate it, I really do, that the time has come. … Now our hands are tied,” Powell said. “I think not only us but councils before us have done a tremendous job in keeping our tax rates low for all these years—and still today, even with a $0.02 tax raise, we’re lower than any other city our size.”

As for other local entities, the city of Montgomery did not change its $0.40 per $100 valuation property tax rate, but Montgomery County lowered its property tax rate from $0.4667 to $0.4475 per $100 valuation for FY 2019-20.

Conroe's staff concerns

The property tax rate increase comes after a citywide compensation study by Evergreen Solutions and the city of Conroe that found most departments, including fire and police, were underpaid compared to other nearby, similarly sized cities, officials said. The discrepancy between pay rates compared to other similarly sized cities creates challenges for recruiting and retaining talent, officials said.

Conroe Finance Manager Denise Morrison said that $3.9 million to address the staff’s compensation, recommended by the study, was included in the operating budget approved Aug. 28. It gives raises to existing employees and formalizes an employee pay grade plan.

According to the salary study, surveyors looked at comparable cities and counties—such as Harris County and the cities of Allen, Frisco and Huntsville—to determine market average salaries for specific positions. The study found that salaries as a whole in the city of Conroe are on average 6.7% below the market average.

For example, Conroe’s fire chief is paid 22% less than the mid-point salary of other cities surveyed in the study. Firefighters are 18% below the market mid-point, deputy fire chief is 40% below, police chief is 24% below, police officers are 13% below and the director of public works is 14% below.

“There are increased services we need, and we cannot say we want to do them if we’re not willing to do what is right,” Council Member Raymond McDonald said Aug. 28. “Other cities recently that are in the $0.70 [rates] went up $0.04 just to keep up. We keep it very low around here.”

Conroe Assistant Director of Finance Collin Booth said he believes the tax rate increase also benefits the city’s reserves. Without the rate bump, Conroe’s 90-day reserves could slide below $1 million within the year.

“That’s not good to operate your budget in a deficit position like [that],” Booth said. “We’ve never been like this before since I’ve been here, and we’re certainly not recommending it. Under the current [property] tax rate of $0.4175, it gets pretty bad pretty quick.”

Resident feedback

Dylan Casper, a firefighter with the city of Conroe and a volunteer for Cy-Fair’s fire department, said he supports the proposed tax rate increase. Casper said he owns a house in a lakeside subdivision in Conroe.

“That’s a very small investment as you look at the monthly numbers to ensure our city can keep up with the rapid growth—being the fastest-growing city in America two years ago—as well as help fund city services and public safety,” he said.

However, resident John Nicks spoke during the citizen inquiry Aug. 28 to reject the budget and property tax rate increases, citing costly city projects including the city’s park and ride program, a commuter route to downtown Houston that opened April 1.

“You don’t realize the pain and suffering of the high property taxes. It’s not just me,” Nicks said. “There’s way too much waste in [the budget] the city could trim that the city is wasting my tax dollars on.”


Bombshell Crossfit
Editor's pick: See best Montgomery County photos this week, May 17-23

On May 18, gyms across the state were allowed to reopen per Gov. Greg Abbott's orders. Crossfit gyms in Conroe, such as Bombshell CrossFit and Crossfit Enoch, reopened with social distancing guidelines in place.

Souq International Markets will open its new Katy-area location soon. (Susan Rovegno/Community Impact Newspaper)
ROUNDUP: Memorial Day business updates from the Houston area

Read some of the latest business news from the Greater Houston area on Community Impact Newspaper’s website.

Houston's unemployment rate hit a record high at 14.2%, leaving more than 450,000 workers unemployed. (Matt Dulin/Community Impact Newspaper)
Greater Houston area sees record-breaking unemployment rate in April at 14.2%

The previous high for the Greater Houston area's unemployment rate was set in January 2010 at 8.7%.

The Montgomery County Public Health District reported two deaths related to COVID-19 May 22. (Andy Li/Community Impact Newspaper)
2 new COVID-19 deaths, 26 recoveries reported in Montgomery County May 22

The deaths reported May 22 include two women in their 70s from Conroe and Montgomery.

Houston ISD interim Superintendent Grenita Lathan said she is exploring multiple options for the 2020-21 school year. (Screnshot via HISD TV)
Longer school days and more: Top stories from this week in Houston

Read the most popular stories covering the Greater Houston area from this week on Community Impact Newspaper’s website.

National study predicts June coronavirus spike in Houston area

New modeling suggests Harris County's lack of social distancing compliance may spur a surge in new cases.

(Designed by Kaitlin Schmidt/Community Impact Newspaper)
As coronavirus among Montgomery County’s seniors rise, statewide efforts to test nursing homes unclear

A recent state order requires 100% of nursing home staff and employees to be tested.

LIST: What is open, closed in Texas and how businesses can operate

Texas openings are staggered with different opening dates and operating limits.

Conroe was identified as one of the fastest-growing cities in the United States from 2010-19. (Andy Li/Community Impact Newspaper)
DATA: Montgomery County cities, towns saw continued growth through 2010s

New U.S. Census Bureau estimates ranked Conroe as one of the fastest-growing large cities in the country.

Texas Medical Center has seen nearly a 26% increase in COVID-19 discharges over the past few weeks. (Courtesy Texas Medical Center)
Texas Medical Center reports continued week-over-week increases in COVID discharges, deaths; hospitalizations, ICU numbers remain steady

Texas Medical Center has seen nearly a 26% increase in COVID-19 discharges over the past few weeks.

All patients, residents and staff at Texas' 23 state hospitals and supported living centers are to be tested for coronavirus. (Courtesy Adobe Stock)
Texas to test all state hospitals, supported living centers for COVID-19

All patients, residents and staff at Texas' 23 state hospitals and supported living centers will be tested for coronavirus regardless of symptoms or exposure.

The Montgomery ISD board of trustees, pictured here from an earlier meeting, met May 21 to interview candidates for the interim superintendent position. (Eva Vigh/Community Impact Newspaper)
Montgomery ISD selects Ann Dixon as interim superintendent

In the meantime, a search firm is conducting a survey until May 25 seeking public input for a permanent superintendent.