June 13, 2026

By Mary Beth Gahan

Preparing a budget for the town is anything but straightforward this year.

Sales tax revenue for Flower Mound is down more than 11 percent. National inflation is at 4.2 percent. The town’s population is growing and that will require more municipal services, especially on the west side.

If the town council doesn’t ask voters to increase the tax rate more than 3.5 percent next November, something will have to give, and that will likely mean cuts to the number of people the town employs, the town manager told council members this week.

“This is not something we are indicating or advocating for,” town manager James Childers said. “Just, really, when you get to the level of meaningful cuts, it's ultimately going to come down to personnel.”

Town staff will present its proposed budget at the end of next month, but have started giving the council and the public an idea of what to expect in the next couple of years. It’s not pretty. While residents have seen lower property tax rates in recent years, the town now has to address a tax revenue shortfall and infrastructure needs to accommodate development on the west side of town.

Childers told council earlier this month that it’s “inevitable” that the town will need a VATRE, or voter-approved tax rate election, to raise the tax rate more than 3.5 percent in November 2027.

He backed off that declaration a bit on Thursday and laid out the other option of cutting back on personnel through attrition, hiring freezes, and not filling vacant roles in an attempt to cut spending. It would not include layoffs. Personnel expenditures account for 74 percent of the $97 million general fund.

“We're not a fat organization,” Childers said. “We don't have a bunch of people sitting around looking for things to do. I think the challenge for us is we always operated lean and now we're kind of in this point of no return.”

Still, he said, that call will be made by the council, not town staff.

“We want to be careful because I wasn't elected. I don't need to be making policy decisions,” Childers said. “When we get into these discussions, the bigger areas like our tax rate, the bottom line, and how it affects our residents, those are decisions y'all need to make as a body, not me as the town manager.”

One reason the town is in this position is the decrease in sales tax revenue. Flower Mound receives two percent of the sales tax the state collects for purchases made in the town limits. Flower Mound has received $13 million in sales tax revenue since Jan. 1, an 11 percent decrease from the same period last year.

Mayor Pro Tem Adam Schiestel asked staff to present at a later date what comparable neighboring cities are doing to address potential budget shortfalls.

Childers said the comparison sometime doesn’t line up. Cities either aren’t growing at the rate that Flower Mound is, or have a robust commercial base that is contributing to the coffers.

Grapevine accumulates more hotel occupancy tax and has a high sales tax revenue. It has collected $34.5 million in sales tax revenue in the first half of the year, a 4 percent increase, according to the Texas Comptroller of Public Accounts. Lewisville has seen an 11 percent increases in sales tax revenue in the same time, bringing in $29 million.

John Zagurski, the town’s CFO, said earlier this month that places like Lewisville were less likely to see a pullback on spending from consumers as inflation rises because they have already cut the fat in their personal budgets. The Consumer Price Index rose 4.2 percent in the last 12 months ending in May, according to the Bureau of Labor Statistics.

“A lot of their people have less discretionary income, meaning they're still going to spend it because they still need food on the table,” he said. “Whereas in a more affluent community like ours, people are make spending decisions like, 'You know what, I'm not going to go to Starbucks' or 'I'm not going out to the weekly family meal.'”

Roanoke, which is experiencing tremendous growth but doesn’t have as large of a property tax base that Flower Mound does, saw a 15 percent drop in sales tax revenue the first half of the year.

Childers, who said before that some of his counterparts are considering a VATRE, did not say which cities that included.

In the latest work session, strategic services director Meg Jakubik generally touched on about $3.75 million in budget items that were organized under titles that reflect the strategic goals that the council identified last year.

Under superior quality of life, Jakubik said they were “nothing big, nothing flashy.” They include senior center requests, air conditioning at the concession stand at Chinn Chapel Soccer Complex, and new windows for potential adopters to see animals at the Flower Mound Animal Adoption Center because dogs have jumped on them and scratched with their claws.

Council member Chris Drew later asked if they could wait a year for the window replacements.

“If we're trying to bridge the gap where the economy starts to pick back up and we start to get more sales tax revenue, these are things we can delay,” Drew said.

Drew also said he wanted to make sure there’s a “good justification” for street repairs and maintenance requests.

“If there are things we can push out, let’s do it,” he said.

For public safety, which includes two of the town’s two biggest departments, requests were for pay level raises to help with retention, safety equipment for firefighters to administer doses of medicine, and software with AI for police to scan social media for threats in multiple languages.

In some areas, the requests go hand in hand with updates and new services that the voters approved in a 2025 bond election.

The library would like to have a vehicle to drive to and from the west side’s 24-hour self-service center for restocking. Jakubik said an option to reduce that cost is to find a vehicle already in the town’s fleet that they can use.

The Community Activity Center expansion, another part of that bond package, will result in a “good amount” of staff being added, Jakubik said.

At the end of the presentation, the council was shown a staffing forecast, which showed the town going from 734 full time positions this current fiscal year to 916 by 2030.

“Don’t freak out,” Childers told council members.

The numbers are dependent on how fast the west develops and when things like a new fire station are needed out there.

Deputy Mayor Pro Tem Brian Taylor said he appreciated that staff pulled back the curtain a bit on what the staff is doing in advance of proposing a budget and “being creative” with moving things around like potentially reusing a car for the library.

He acknowledged the looming staff increase that is forecast to impact the town in the next five years.

“Knowing that we have to plan for it at some point is very beneficial,” Taylor said.

The council will get a property and sales tax update at Monday’s meeting.