Page 30 - FortWorthFY22AdoptedBudget

Executive Message

GENERAL FUND REVENUES

While the City has prepared for fewer resources in FY2022, Fort Worth is still expecting a positive economic
outlook with property tax revenue, along with fee income, continuing to grow.

General Fund Revenue Budget
Adopted Adopted Percent Dollar
FY2021 FY2022 Change Change
$782,064,035 $831,934,777 6.38% $49,870,742

Property Tax

The City receives the majority of its revenues from property taxes assessed on real and personal property. City
staff works with appraisal districts from Tarrant, Denton, Wise, and Parker Counties to prepare property tax
revenue projections. By State law, each appraisal district is responsible for the valuation of all property within its
jurisdiction. The certified property tax rolls received from all four districts in July 2021 showed an increase in the
City’s property tax base. In comparison to the July 2020 certified property tax roll, the July 2021 certified property
tax roll reflected a 9.4 percent growth in adjusted net taxable property value, mostly due to new construction.

When updating the seven-year financial forecast and preparing the budget for City Council consideration, staff
analyzed many of the factors impacting property tax revenue, including anticipated population growth, historical
change in values for residential and commercial properties, current and projected permitting data, the impact of
foreclosures, as well as exemptions and protests. Staff also evaluated the allocation of the levy amount, and
resulting availability of revenue for operations and maintenance (O&M), as compared to the amount available to
repay the city’s debt.

For FY2022, the city’s combined property tax rate is to be lowered to $0.7325 per $100 of assessed valuation, with
the collection rate remaining at 98.25 percent. Based on the O&M levy rate of $0.5850 per $100 of assessed
valuation, the General Fund portion of the property tax rate is expected to yield approximately $476 million in
revenue for FY2022. The debt service levy rate of $0.1475 per $100 of assessed valuation is expected to yield
approximately $120 million, which will allow the repayment of all current and proposed debt obligations.

Going forward, long-range planning includes expectations of an eventual downturn in property tax revenues,
despite rising property values, due to the legislative revenue caps and the governing body’s desire to minimize
the financial burden on taxpaers. The City was fortunate to see an increase in certified values during the pandemic
and its economic outlook reflects the growth as new residents and businesses continue to move to Fort Worth.

Sales Tax

Sales tax collections are the second major revenue component. In developing the FY2021 budget last year, the
City took a cautious approach to formulating sales tax projections. Fort Worth has continued to show resiliency
where consumers have sustained spending which generate sales tax receipts. This consumer behavior pushed
sales and use tax collections to exceed the original assumptions for last fiscal year. Due in part to this recent
activity, and lifting of restrictions due to the COVID-19 pandemic, the FY2022 budgeted sales tax is shown with a
fairly significant increase as compared to last year. In addition to the rise in recent collections over the original
expectations, Fort Worth is still leading the way in population growth, as the 12th largest city in the United States,
and is still growing. Sales tax collections were evaluated using recent activity, historical trends, and many other
economic indicators for the local economy, to determine tax revenue. Based on this evaluation and FY2021 year-

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