Page 30 - FortWorthFY23AdoptedBudget

Executive Message

GENERAL FUND REVENUES

While the City has prepared for fewer resources in FY2023, 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
FY2022 FY2023 Change Change
$831,934,777 $915,340,881 10.03% $45,379,662
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 2022 showed an increase in the
City’s property tax base. In comparison to the July 2021 certified property tax roll, the July 2022 certified property
tax roll reflected a 14.5 percent growth in adjusted net taxable property value, mostly due to increasing values on
real property.

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 FY2023, the city’s combined property tax rate is to be lowered to $0.7125 per $100 of assessed valuation, with
the collection rate increasing to pre-pandemic levels to 98.50 percent. Based on the O&M levy rate of $0.5650
per $100 of assessed valuation, the General Fund portion of the property tax rate is expected to yield
approximately $532 million in revenue for FY2023. The debt service levy rate of $0.1475 per $100 of assessed
valuation is expected to yield approximately $139 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 FY2022 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 to this recent activity, the
FY2023 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 13th 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 FY2022 year-end budget projections, tax revenue is expected to increase in FY2023
by 16%, or $16.0M, from budgeted FY2022 sales tax and is budgeted at $212,147,461.

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