The Woodlands non-annexation agreement

I have mixed feelings about this.

Mayor John Whitmire

Houston leaders have approved a $50 million deal with The Woodlands, guaranteeing the city will never annex the township and winding down a shared project fund between the entities.

The agreement passed city council Wednesday morning, with Mayor John Whitmire and city finance officials praising a “win-win deal” that will give Houston a rare infusion of funds and help shore up the city’s struggling general fund budget amid ongoing financial woes – though critics warned the move produces quick cash at the expense of significant future funding.

“We better be responsible and accept this $50 million because we may never see it again, and Lord knows we need it,” Whitmire said.

The deal, which received unanimous support from The Woodlands Township Board of Directors last week, amends a 2007 agreement that originally blocked annexation through 2057. The possibility of annexation is now eliminated indefinitely as long as the deal’s terms are met.

In exchange, The Woodlands will relinquish $22.6 million sitting in a shared project fund fed by both entities’ sales tax revenue, then pay Houston $9 million in 2027, $9 million in 2028, and $9.4 million in 2030.

City Controller Chris Hollins warned the deal trades immediate cash for the city’s long-term financial health. Houston currently receives roughly $2.4 million each year from The Woodlands through the fund, with future contributions projected to grow based on rising sales taxes.

Hollins argued in a Tuesday night letter to council members that Houston is likely leaving at least $100 million in future revenue for projects on the table in exchange for a one-time infusion of general fund cash.

“This is a short-term fix that does not solve our city’s problems,” Hollins said. “This is not a deal that any of you would make with your own money, and we shouldn’t do it with taxpayer dollars either.”

Whitmire has argued that such projections are not guaranteed. The state Legislature has not viewed annexation deals positively and could once again alter state laws on incorporation or regional partnerships over the thirty years. Houston is better off making a deal now, he said.

Some council members also worried state lawmakers would seek to punish the city if the deal was rejected.

Annexation has long been considered unlikely, however, especially after the Texas Legislature in 2017 ended forced municipal annexation, requiring an automatic voter referendum before larger cities could annex smaller communities.

It’s easy to understand the justification for this deal. The city does need the money. Given the current wobbliness of the national economy, inflation may greatly devalue the future value of the long-term deal. And yes, the Republican leadership is always a threat, though that at least could be mitigated by, you know, electing more people that don’t hate cities and Democrats. It’s a tacit admission that the Mayoral strategy of trying to appease our abusers in the hope that they’ll leave us alone isn’t so viable. We also seem to have gotten a decent price. For sure, this isn’t a Chicago parking meters situation.

I also very much understand Controller Hollins’ objections. We’re turning off a revenue source that would long outlast the value of this deal. We probably could have gotten an even better deal – if the Woodlands Township board ratified it unanimously, they thought it was a good deal for them. The legislative threat might look very different in a couple of months, in which case maybe we should have waited a bit.

I get it. I’m not sure I like it, but I’m also not sure it’s wrong. It will help in the here and now, and that is very much not nothing. Campos and Houston Public Media have more.

Related Posts:

• And here comes the voluntary retirement plan
• Firefighter deal certified and approved
• July 2026 campaign finance reports – City of Houston