Houston City Council voted 13-1 to approve an agreement with The Woodlands Township that permanently rules out annexation of the community, in exchange for $50 million in payments to the city over the next several years.
The Wednesday vote amends a Regional Participation Agreement the two governments first signed in 2007, which had already prevented annexation through 2057. Under the revised terms, The Woodlands will pay Houston nearly $23 million in 2027, followed by additional annual payments, while ending its obligation to send a portion of its sales tax revenue to a joint fund shared with the city. That fund has been used over the past 20 years for projects such as repaving roads and improving parks.
The $50 million breaks down into $22.6 million already sitting in that joint fund, plus $27.4 million in additional payments through 2029. Of that $27.4 million, $7.9 million was already owed to Houston under the original 2007 agreement, while the remaining $19.5 million will come from The Woodlands’ cash reserves.
The Woodlands Township Board of Directors unanimously approved its side of the agreement on Aug. 26.
Township Chairman Brad Bailey said the deal removes uncertainty that lingered in The Woodlands even after the Texas Legislature ended forced annexation statewide in 2017. “The annexation boogeyman is dead,” Bailey said. “We thought that was very, very important. State laws changed that, but state law can change, too. So, this clearly cleans it up and makes sure that the annexation is not a situation anymore.”
Houston Mayor John Whitmire told council members before the vote that the city needed the money. “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 initial payment is expected to nearly close a forecasted shortfall of about $26 million in the city’s general fund.
City Controller Chris Hollins opposed the agreement, telling council members it was a “bad deal” that “makes no sense.” In a statement ahead of the vote, Hollins said historical projections show The Woodlands would have paid Houston nearly $200 million by 2057 under the existing agreement and argued the city is trading away that long-term revenue for less than $30 million to cover a short-term budget gap.
Whitmire called Hollins’ projections “wild speculation,” though his administration did not offer its own counter estimate.
Councilmember Joe Panzarella cast the only vote against the agreement after questioning Hollins about the potential loss of revenue. Councilmember Sallie Alcorn, who chairs the budget and fiscal affairs committee, defended the deal, comparing the city’s search for revenue to “looking under the couch cushions for money.” “This is the best thing for the city to put us in a better position than where we were yesterday,” Alcorn said.
Councilmember Twila Carter, who represents Kingwood, an area Houston annexed in 1996, said she supported the deal despite her district’s own history with annexation. “I certainly will be supporting because I think it’s truly in the best interest of our city and our citizens, because we’re not gambling on what will be; we are deciding on what we know to be today,” Carter said.
Councilmembers Carolyn Evans-Shabazz, Tarsha Jackson, and Edward Pollard were absent from Wednesday’s vote.
The disagreement over the Woodlands deal is the latest clash between Whitmire and Hollins, who have sparred over city budgets and opened ethics investigations into one another over the past several years. Houston’s fiscal year 2027 budget, passed earlier this summer, closed a shortfall that had grown as large as roughly $220 million through cost cuts, a new monthly trash fee, and a right-of-way charge on the city’s water utility.
Annexation has been a recurring issue for communities near Houston.
Houston annexed Clear Lake in 1977 and the Kingwood area in 1996, both moves that drew opposition from residents. The Woodlands entered into separate Regional Participation Agreements with both Houston and Conroe in 2007, each designed to block annexation from either city for 50 years. Wednesday’s amendment applies only to the Houston agreement, making that portion of the annexation ban permanent rather than letting it expire in 2057.
