More commercial properties lead to a drop in Shenandoah property tax rate

In addition the city is not dependent on property taxes for regular city operations, Finance Director Jennifer Calvert said.

“We’ve had several new commercial properties: Memorial Hermann [The Woodlands Hospital], Ethan Allen is opening up [a new furniture store], all of our new homes, Sunningdale Apartments and Courtyard Marriott,” Smith said. “All of those businesses—in addition to regular valuation increases—helps the city.”

Yet the city is careful not to let its property tax rate drop so low that the city is unable to keep operations running normally when there are retail disruptions affecting sales tax, Smith said. City operations include providing water, police and public safety services and code enforcement.

“You have to have an ability to raise money in an emergency,” Smith said. “If some catastrophic natural disaster shut down our retail business for any period of time, that would put the city at a financial disadvantage. Fortunately we have enough reserves to take care of most of the foreseeable future in those type of disasters.”

The construction of the Hwy. 242 flyover at I-45 has affected area businesses, Smith said.

“We’ve been able to handle a decline [in sales tax revenue] without any hiccups in service,” Smith said. “We’ve been able to keep up with our normal operations even though we have had a reduction in sales tax.”