The most important number on a Flower Mound tax bill this fall is a gap of less than a tenth of a cent. The Town's FY2026-27 budget took effect October 1 and holds the property tax rate at $0.387277 per $100 of value. The state's tax-rate worksheet puts the voter-approval rate for 2026 at $0.388266. The Town can't climb past that line without asking voters, and it is already standing close to it. Town staff expect to ask. The west-side retail that town leaders hope will ease the pressure sits on a much slower timeline.
A Rate Set Right Against the Ceiling
Three rates frame the Town's portion of a Flower Mound property tax bill for 2026:
| Rate type, 2026 | Per $100 of value | What it means |
|---|---|---|
| No-new-revenue rate | $0.370440 | The rate that would raise the same revenue as last year from the same properties |
| Adopted rate | $0.387277 | What the Town is actually levying for FY2026-27 |
| Voter-approval rate | $0.388266 | The highest rate allowed without an election |
The adopted rate is $0.000989 below the ceiling. The Town's own example home has a taxable value of $473,692. On that home, the unused room comes to less than $5 a year. The Town hasn't raised its rate. It has simply used almost all of the growth the law lets it take without an election.
The limit comes from Senate Bill 2, passed in 2019. It caps growth in maintenance-and-operations property tax revenue at 3.5% unless voters approve more. Before that law, Texas cities could grow that revenue by 8% before an election was required. Flower Mound's October budget notice names SB 2 directly, along with persistent inflation and "a 7% reduction in the Town's sales tax base."
The Sales Tax Cushion Has Been Thinning All Year
The budget notice states the 7% figure without explaining what caused it. The Texas Comptroller's monthly payments to the Town show the same direction more plainly. In every month of 2026 through September, Flower Mound's allocation came in below the same month a year earlier:
| 2026 month | Payment to Flower Mound | Change vs. prior year |
|---|---|---|
| January | $2,134,903 | −6.79% |
| February | $2,857,842 | −14.63% |
| March | $1,863,839 | −21.03% |
| April | $1,741,925 | −5.37% |
| May | $2,489,793 | −4.64% |
| June | $2,001,294 | −13.97% |
| July | $2,044,052 | −7.70% |
| August | $2,496,019 | −2.69% |
| September | $2,169,492 | −6.58% |
From January through September 2026, payments totaled $19.80 million, compared with $21.88 million for the same months the year before. That is a 9.5% drop. These are allocation payments, which aren't the same measure as the "sales tax base" in the budget notice. Anyone can check the monthly figures in the state's sales tax allocation dataset.
A pending court fight over how Texas sources local tax on online sales doesn't explain the drop. The disputed Comptroller rule was blocked in district court in 2024. The Comptroller was still asking an appeals court to reinstate it in September 2026.
Why New Development Doesn't Close the Gap
When residents suggested at council meetings that the Town could approve more development and grow its way out, finance staff pushed back on the record.
"Every city will eventually face a VATRE. The only way you don't face one is if you aren't heavily dependent on property tax revenue. People like to say, 'just add something new and it will pay for this,' but the reality is you can't live off growth to pay for current services." John Zagurski, Flower Mound CFO, July 2026
A VATRE is a voter-approval tax rate election. Zagurski's reasoning is that every new household, business or large project also adds demand for services. Town Manager James Childers explained why the squeeze is only showing up now. The pandemic came right after SB 2 passed, bringing federal aid while online purchases kept sales tax steady. That leeway has ended, and spending is rising faster than revenue.
Some of the pressure comes from choices made for homeowners. In June 2025, the council raised the Town's homestead exemption to 20%, the most state law allows. Zagurski put the cost at about $16 million in forgone revenue. New state exemptions for business personal property took away another few hundred thousand dollars. The Town of Flower Mound says the new budget keeps the 20% exemption and the $150,000 exemption for homeowners 65 and older or with qualifying disabilities. It also pauses market pay adjustments for Town employees during FY2027 while granting a 3% cost-of-living increase.
What Monarch Is, and When It Can Start Paying
Monarch is the Town's bet on its west side. The project covers about 200 acres along I-35W and would give Flower Mound its only highway frontage on that corridor. In August, the council approved changes that allow outdoor storage and seasonal sales at two planned home improvement centers and permit up to three gas stations. Two big-box retailers expect to build fuel stations on site. Mayor Pro Tem Adam Schiestel called it "a huge tailwind for us for sales tax generation," citing inflation and the legislature.
The land swap with Argyle shows how much the Town wanted it. Flower Mound gives Argyle 62.155 acres and receives 8.3275 acres in return. Argyle approved the swap unanimously on September 21. Most of the land Flower Mound gives up can't be developed and is hard to reach from the Flower Mound side. About four of the acres it gains are buildable. The Town expects to use them for extra water detention, which would leave room in Monarch for a fifth big-box store. The donated acreage must remain parkland, open space or low-light public facilities.
Here is how the two timelines line up, based on what has been reported:
- Now, October 2026. The budget is in effect, with the rate set just under the voter-approval ceiling. A big-box retailer, not named in the report, is in the Town's permitting process.
- Denton Creek Boulevard. Construction continues on the road meant to cross Monarch and connect to I-35W. In April, Denton County committed $1.7 million to it, with no completion timeline yet.
- 2027. Staff say voters will likely see a rate proposal, with any change applied to the FY2028 budget.
- Around 2028. Jonathan Kerby of the engineering firm Kimley-Horn said in a report by the Cross Timbers Gazette that TxDOT plans to add an I-35W frontage road and interchange along the Monarch property "within the next two years." That was his August 2026 estimate, not a published TxDOT schedule.
So the rate decision comes first, and the highway access that is drawing Monarch's tenants comes after it. A retailer could open before every road is finished. Still, nothing published suggests big-box sales tax arrives in time to head off a 2027 vote.
Reading a Flower Mound Tax Line With 2027 in View
For a buyer comparing suburbs, the Town is a smaller part of the bill than the headlines suggest. For Denton County residents, the combined 2026 rate is 1.648471. Flower Mound's share is 23.5%, Lewisville ISD's is 65.4%, and Denton County's is 11.1%. On the Town's example home, the Town's portion comes to $152.88 a month, and about two-thirds of it goes to fire, emergency services and police.
Zagurski estimated that if voters approved a 3.5% rate increase, the average resident would pay about $5 more a month, based on 2026 numbers. If voters reject it, the Town will have to cut spending. In other words, a 2027 election is less about a big jump in the Town's line and more about which level of service voters choose to pay for. Zagurski also said many homeowners have paid about the same amount to the Town over the past five years. A buyer modeling carrying costs can treat the Town's line as fairly steady with a modest, publicly debated step-up likely ahead. The larger school district share is the line to watch most closely.
Buyers looking at west Flower Mound face a longer horizon. Monarch's plan includes 250 townhomes, cut from 290, expected to range from the high $500,000s to the high $700,000s, along with ponds, trails and a pocket park. Shopping and highway access on that side of town depend on road projects that don't yet have firm finish dates.
A Few Questions That Come Up Often
Has Flower Mound raised its tax rate for FY2026-27? No. The rate stays at $0.387277 per $100.
Did Texas lower the 3.5% cap? Mayor Cheryl Moore said lawmakers considered cutting it to 2.5% during the 2025 sessions. Flower Mound's 2026 worksheet still uses the 3.5% multiplier.
Which retailers are coming to Monarch? The August 2026 report names no tenants. It says one big-box retailer is already in the Town's permitting process and describes two home improvement centers, two big-box stores with fuel stations and a possible fifth big-box store.
This post is general market information, not tax or financial advice. Please confirm figures for any specific property with the appraisal district and a qualified tax professional.
If you are weighing a Flower Mound home and want to understand the full tax line before you write an offer, Betsy Daniel can walk through the Town, school district and county portions for the specific property, along with what the 2027 calendar may bring. Schedule a Consultation.
