Setting the Tarrant County property tax rate remains a central issue during the budget process for the Fort Worth City Council and City staff. This tax revenue is crucial for funding city operations and essential services.
Why it Matters: Property tax bills support multiple entities, including school districts, home counties, and the City of Fort Worth. The city's portion is just a fraction of the total bill. Balancing sufficient revenue collection with minimizing the tax burden on property owners is a key concern.
Tax Allocation: Fort Worth's property tax revenue is divided into three main categories:
- Maintenance & Operations (M&O): Funds daily city operations, including police, fire departments, administrative staff, and parks.
- Pay-As-You-Go (PayGo): Introduced in FY15, this subcategory funds small capital projects and equipment purchases with cash, reducing reliance on debt.
- Interest & Sinking (I&S or debt): Used to repay borrowed funds for major capital projects and infrastructure.
By the Numbers:
- The FY 2024 tax rate is 67.25 cents per $100 assessed valuation.
- 45.5 cents per dollar is allocated for operations, 7 cents for PayGo, and 14.75 cents for debt repayment.
- The 2024 tax rate will generate $736 million, with $574 million allocated to the General Fund.
As Fort Worth grows, generating more property tax revenue, the tax rate often decreases. In 2024, the rate fell by 4 cents from the previous year due to significant growth.
Transparency and Legislation: The Texas Legislature mandates transparency about tax revenues. Fort Worth must report:
- No-New-Revenue Tax Rate (NNR): The rate needed to generate the same revenue as the previous year on the same properties.
- Voter-Approval Tax Rate (VAR): Allows a 3.5% revenue increase on existing properties. Any rate above the VAR requires local election ratification.
City staff model various tax rate scenarios before making recommendations to the City Council, using estimated property values received prior to final valuations each year.
