Fort Worth plans to lower its property tax rate, but you’re likely to pay more
The city tax rate for Fort Worth property owners could drop for the fifth time in six years, although home owners are likely to see higher tax bills because of steeply rising property values.
The Fort Worth City Council this week learned in a presentation by City Manager David Cooke that because of increased property tax revenues the city will be able to spend nearly $2 billion to fix water lines, address storm water drainage and complete many other projects during the next five years — while also lowering the city’s property tax rate by 2% for 2022.
Fort Worth expects that its property tax rate for 2022 will be 73.25 cents per $100 valuation, 1.5 cents lower than the current rate. The city’s property tax rate has steadily declined since 2016, when it was 85.50 cents per $100 valuation — although, because of skyrocketing property values, many residents have actually experienced higher tax bills since then.
The median price of a home in Fort Worth has increased from $190,000 to $300,000 during that time, according to the Texas Real Estate Center at Texas A&M. So the owner of a $300,000 home with a homestead exemption would pay $1,758 under the proposal. City taxes on the same home in 2016 were $1,299.60.
The City Council is scheduled to approve the budget and adopt a new tax rate in September. Several public meetings on the budget remain before that vote takes place.
City property taxes are often one of the largest items on residents’ annual property tax bills, although usually not as high as public school taxes. Residents who wish to calculate their taxes can use a tax estimator on the Tarrant County website.
The need for the city’s capital improvement program, including the continuing work on projects in a 2018 bond referendum approved by voters, came into focus after a historic winter storm in February exposed a large number of old water pipes that need to be replaced, Cooke said. That storm kept North Texans in their homes for days, many without electricity and running water — and, once the ice began to melt, thousands of residents reported that their pipes in their homes burst.
Fort Worth reported at least 660 water main breaks immediately after the storm.
Many residents reported being without running water for days, as plumbing repair crews scrambled to repair the old water lines.
“You’re going to hear us talk about accelerating the replacement of cast iron pipes,” Cooke told the council during a work session on Tuesday. “That was the type of pipe that was problematic during the recent winter storms.”
The city is growing at about 15,000 to 20,000 residents per year, which is squeezing its ability to maintain existing infrastructure while also providing new roads, sidewalks and utility lines for newly built neighborhoods.
“In five years, we add the equivalent of 100,000 people. Just think about the infrastructure requirements for a community of about 100,000 people, and we’ve got to plan and execute that every five years,” Cooke said. “That’s just new infrastructure. It doesn’t talk about the infrastructure that already exists in the city.”
The historic growth is increasing property tax revenues. The city expects that the net taxable value of property within its limits will be $87.37 billion, up about 9.4% from $79.88 billion a year ago. However, state law restricts local governments from raising property tax revenue by more than 3.5% a year without holding an election.
In all, the city expects to collect about $596 million in property tax revenue in 2022.
Cooke said the city was fortunate that the taxable value was so high. In recent months, as the city began reopening after the COVID shutdown, city officials had worried that commercial property values would remain low because of stifled business activity related to the pandemic — possibly putting the city into a budget crisis — but in fact commercial growth has resumed, he said.
In addition to continuing work on projects in the 2018 bond referendum, the council also is expected to call another bond referendum next year to request more money from voters for improvements to water, sewer, sidewalks and other needs.
In all, the city’s capital program for the next five years includes $1.96 billion in improvements, including $1.1 billion for water, $580.7 million for general purposes, $122.6 million for storm water, $80.9 million for aviation, $34.5 million for public events (i.e. convention center improvements) and $10.6 million for solid waste.
The city’s proposed general budget also includes another $580 million in total expenditures during the next five years. That includes $192.1 million for transportation, $135.4 million for capital outlay, $114.7 million for community improvements, $80.7 million for city facilities, $56.6 million for information technology and $1.1 million for asset management.
The City Council is expected to hear more about the operating budget and other related matters during its next meeting Aug. 10.
Several council members asked Cooke to come to that meeting with additional details about a variety of items.
Carlos Flores and Jared Williams asked for more information on a proposal to provide $850,000 for transit needs, up from $350,000.
Council member Leonard Firestone asked for information on how much of the city’s capital plan is spent on amenities such as parks or government buildings that don’t generate property tax money.
Elizabeth Beck asked for more information on whether the city could legally keep its current tax rate instead of dropping it by 1.5 cents — a move that would provide millions of dollars of additional funding.
Council member Gyna Bivens asked Cooke to instruct his staff to do more to get information about the city’s financial health to residents — even those who don’t follow municipal affairs closely.
“You know we will have people who are not engaged and not signed up with city news,” Bivens said. “I don’t expect you to be a magician and reach out and find all those people, but I do expect that the city staff will do everything possible to get this message out to the public.”
This story was originally published August 5, 2021 at 5:30 AM with the headline "Fort Worth plans to lower its property tax rate, but you’re likely to pay more."
