Flower Mound's Tax Squeeze: What the Numbers Actually Mean for Your Bill

The Rate Is Flat. The Problem Isn't.

Your Flower Mound property tax rate for FY 2025–26 is $0.387277 per $100 of assessed value. That's one one-hundred-thousandth of a dollar lower than last year. You will not feel it. What you might eventually feel is the fiscal reality that produced it — because the town hit its legal ceiling, both revenue legs buckled at the same time, and the only lever left above this point requires a public vote.

That's not alarm-sounding. That's the math.

How the Rate Works — and Why It Can't Go Higher Without You

The rate breaks into two pieces: $0.334294 for maintenance and operations — the day-to-day expenses of running the town — and $0.052983 for interest and sinking, which covers debt repayment.

The FY 2025–26 budget was built on that $0.387277 rate. That figure also happens to be the voter-approval tax rate — the hard ceiling Texas law sets on what a city can charge without going to a public election. Council could have gone lower. It couldn't legally go higher. So what you're looking at is not a comfortable resting point; it's the wall.

Budget director Childers named the core challenge plainly: maintaining current service levels and keeping staff compensated in line with town policy while also dealing with stagnant sales tax and declining property tax revenues.

The Revenue Shock That Changed Everything

Flower Mound has always run on growth. New homes reset to higher appraised values. New commercial development adds fresh taxable property to the rolls. That engine stalled.

For the first time in 15 years, the town's property tax base decreased by two percent compared to the prior year's certified tax roll. When accounting for new growth, the loss is closer to five percent. Mayor Cheryl Moore attributed this decline primarily to a lack of new development and home sales.

With some of the highest interest rates seen in the past decade and economic uncertainty, fewer people have sold their homes — and there has also been a decrease in new builds. Fewer sales mean fewer resets to market value. Fewer new builds mean less new taxable acreage entering the rolls.

CFO John Zagurski was more direct about the speed of it. "My outlook from [July 1] to the end of July rapidly changed because we saw things change that had never happened before in the history of the town," he said. That is not routine budget-season hedging. That is the town's top finance official saying something structurally new happened.

What the Town Has Done to Cushion the Bill

Council has been working the exemption lever hard, and they just maxed it out.

For several years, the council has been focused on increasing homestead exemptions. In 2018, Flower Mound approved its first homestead exemption at the greater of $5,000 or 2.5% of value. It was doubled to 5% in 2021, doubled again to 10% in 2022, and raised to 12.5% in 2023. In 2025, council voted to increase it to equal the greater of $5,000 or 20% of value — the highest level allowed for a municipality in Texas. Residents see that new 20% exemption on their 2025 property tax bill.

There is nowhere left to go on that dial.

On the bright side for the overall bill: Denton County separately dropped its own rate from $0.187869 to $0.185938 — the lowest county rate since 1986. Your total tax bill includes the town rate plus whatever Denton County, Lewisville ISD, and any other overlapping entities charge, so that county cut does put a little money back.

Context matters, though. The median effective property tax rate in Flower Mound is approximately 1.63%, higher than both the Texas state median of 1.48% and the national median of 1.02%. The median annual Flower Mound tax bill is approximately $9,148. (That figure comes from Ownwell, a commercial tax-appeal firm, so treat it as directional rather than official — but it's the best public number available.) Renters and commercial property owners also get none of the homestead exemption benefit; the relief is reserved for primary-residence owners.

The Bond Program and the New Debt Line

In May 2025, Flower Mound voters approved an $82 million bond package for park and recreational facilities, trails, sports fields, and the Community Activity Center — plus another $30 million for street improvements. The town's last bond election that passed was in 2002. Calling a bond election marked a change in financial strategy.

The town holds a AAA bond rating — the highest possible from its independent rating agency — which keeps borrowing costs lower than they'd be otherwise. The town does not anticipate the current tax rate will increase because of either proposition; the current rate is stated to be sufficient to cover these projects.

The shift to bond financing permanently adds a debt service line to future budgets. That reduces flexibility in the tight years that appear to be coming.

What Comes Next: The VATRE Question

Here is the honest version of the next few years.

Town staff signaled that, in future fiscal years, maintaining expected service levels may require calling a voter-approval tax rate election — a VATRE. No VATRE will be called for FY 2025–26, but if one is considered in future years, staff will develop two parallel budgets.

A VATRE is not a threat and not unusual — it is the legally prescribed mechanism under the Texas Tax Code when a city needs to exceed its voter-approval rate ceiling. It puts the question to residents directly. If voters approve it, services hold. If they don't, cuts follow. A second parallel budget is not a small lift, and the uncertainty it introduces into service planning is real.

The town is also pressing ahead with capital needs regardless: five street reconstruction projects and five traffic signal projects are included in the FY 2025–26 capital improvement plan.

The structural bind is this: expenses — staff pay, public safety, infrastructure — rise with inflation. The tax base and sales tax receipts are flat or declining. The exemption is maxed. The rate is at the ceiling. The next move, if revenue doesn't recover, is either a public vote or a service cut. Those are the actual options. Everything else is a rounding error.