Page 166 - HaltomCityFY25Budget

City Of Haltom City Annual Budget, FY2025 Supplemental Information

MULTI-YEAR FINANCIAL OUTLOOK: HALTOM CITY

Governmental Activities:

Haltom City’s Multi-Year Financial Outlook underscores a strategic and proactive approach to financial
management, acknowledging both the successes and challenges posed by the evolving economic landscape.
The City has reduced in property tax rates by 17% over the last 10 years while at the same time doubling sales
tax revenue, primarily driven by strong commercial and economic growth.

An upcoming contributor to Haltom City’s growth is a new 50-acre development to include HMart grocery
store and 50 new retail and restaurants sites. Additionally, three Marriot’s, each featuring multiple retail and
restaurants outlets, is scheduled to start construction in the summer of 2025 while the new Holiday Inn is nearing
completion. The Heritage Village Subdivision, comprising 412 new homes, is also nearing full completion. These
developments complement ongoing expansions along the IH-820 Corridor, which have added two business
complexes, generating new tax-producing industries over the past several years.

City receives a total sales tax rate of 8.25%, with 1.375% allocated to the General Fund, 0.375% for Streets, and
0.25% for the Crime Control and Prevention District. Sales and Use tax for the fiscal year ending in 2024 for the
General Fund is up 7% (unaudited) over the budgeted $13.7 million revenue and is projected to grow to $14.1
million in fiscal year ending 2025. The City’s dedicated sales tax for Streets and Crime Control are also expected
to benefit from increased revenue, as well.

In a significant policy shift, the Tarrant Appraisal District (TAD) has adopted a new approach to residential
property appraisals. Starting in 2025, TAD will conduct residential appraisals biennially instead of annually. This
change aims to provide homeowners with more predictability in property valuations and potentially mitigate
the frequency of substantial year-over-year increases. The FY2024-2025 budgeted Ad Valorem anticipates a
6.2% increase in revenue over the yearend $14.6 million collected (unaudited). The City anticipates a more
modest increase in the FY2025-2026 budget with TAD’s new policy implemented. To offset the biennial appraisal
approach, the City is averaging the expected needs biennially.

Anticipated Economic Changes Impacting Residential Housing and Inflation:

Several economic factors are expected to influence residential housing and overall inflationary costs in the
coming years, including the recent presidential elections:

• Interest Rates: The Federal Reserve’s monetary policy will play a crucial role in shaping the housing
market. While interest rates have been elevated to combat inflation, projections indicate a gradual decline. The
federal funds rate is expected to decrease from 4.5% in the fourth quarter of 2024 to 3.6% in the fourth quarter
of 2025 according to the Congressional Budget Office “An update to the Economic Outlook: 2023 to 2025”. Lower
interest rates could enhance housing affordability and stimulate market activity