Page 31 - City of Fort Worth Budget Book

Executive Message Budget Message

GENERAL FUND REVENUES
In FY2025, Fort Worth is expecting a positive economic outlook with property and sales tax revenue, along with
fee income, continuing to grow.

General Fund Revenue Budget
FY2024 FY2025 Percent Dollar
Adopted Rec. Change Change
$ 1,013,812,390 $ 1,062,507,450 4.8 % $ 48,695,060

Property Tax

The City receives the majority of its General Fund 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 2024 showed
an increase in the City’s property tax base. In comparison to the July 2023 certified property tax roll, the July 2024
certified property tax roll reflected a 5.4 percent growth in adjusted net taxable property value, mostly due to new
property added to the tax roll.
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 FY2025, the city’s combined recommended property tax rate is the no-new-revenue rate of $0.6773 per $100
of assessed valuation, with the collection rate remaining at 98.5 percent. Based on the O&M levy rate of $0.5298
per $100 of assessed valuation, the General Fund portion of the property tax rate is expected to yield
approximately $613 million in revenue for FY2025. The debt service levy rate of $0.1475 per $100 of assessed
valuation is expected to yield approximately $171 million, which will allow for the repayment of all current and
proposed debt obligations.

Values increased at a slower rate in tax year 2024 than has been seen in much of the past decade. This could be
due to a combination of increased protest activity by property owners and the evolving nature of appraisals in the
Fort Worth area. While new property added to the tax roll will continue to fund growth in the City of Fort Worth,
staff will consider long-range scenarios in which property values do not grow at rates seen in recent years.

Sales Tax

Sales tax collections are the second major revenue component. In developing the FY2024 budget last year, the
City adapted to the accelerated growth captured in this account since the end of lockdowns during the COVID-19
Pandemic by setting a budget of $250M. Throughout the year, City staff monitored sales tax receipts and is
forecasting to collect an amount less than the $250M adopted budget. The FY2025 budgeted sales tax figure
recognizes that growth may have moderated, but still assumes growth closer to the long-term historical average of
5-6% annually. Fort Worth is leading the way in population growth as the 12th largest city in the United States and
one of the fastest growing among large cities; this population growth is expected to continue driving sales tax
upward despite the below-budget forecast in FY2024. Sales tax collections were evaluated using recent activity,
historical trends, and many other economic indicators for the local and national economy to determine tax
revenue. Based on this evaluation and FY2024 year-end budget projections of $239.5M, tax revenue is expected
to increase in FY2025 by 1.1%, or $2.7M from budgeted FY2024 sales tax and is budgeted at $252,700,000.

31