The Fort Worth City Council is considering lowering the city’s tax rate by two cents, but coupled with a nearly 9 percent increase in property values this year, the city still anticipates taking in additional $24 million in revenue over 2015.
Fort Worth has one of the highest property tax rates in the Metroplex, currently at 85.5 cents per $100 assessed valuation. City Manager David Cooke Tuesday proposed to the council lowering the rate to 83.5 cents per $100 assessed valuation.
That would mean a $20 savings on the city’s portion of a property owner’s property tax bill in a house appraised at $100,000.
Mayor Betsy Price said lowering the tax rate is “the right thing to do” because property values have gone up, this year 8.8 percent. But lowering it will also make Fort Worth more attractive to investors and potential corporate relocation, she said.
“We’re a robust city where values are staying strong and we’re growing,” Price said. “But it also means our citizens are going to see a bigger tax bill if we keep the same rate. We see our competitiveness slipping to other cities whose rates are lower.”
But it hasn’t always been that way. And since the Great Recession that began about a decade ago, Fort Worth has been chipping its way back from layoff employees to hiring them to meet growth demands, including staffing a new police division and two new fire stations, among other things.
Councilman W.B. “Zim” Zimmerman said it’s remarkable how the market has turned around in Fort Worth, reminding everyone that just seven years ago the council was trying to figure out how they were going to come up with $70 million to meet obligations.
“To be where we are today is extraordinary,” Zimmerman said. “It’s even more extraordinary that we’re doing this in a very measured and very logical and very commonsense way.”
State lawmakers have been on the backs of cities and other taxing entities statewide to provide some relief and lower property tax rates.
Cooke kicked off the city’s Fiscal 2017 budget process Tuesday by revealing the lower rate, but also recommended dedicating a larger portion of that rate to the pay-as-you-go fund used in capital improvement projects. Currently, 4.75 cents of the tax rate is used to cash flow projects, but Cooke wants the council to consider bumping that to 6.5 cents.
At a City Council retreat earlier this year, Cooke had recommended that increase happening gradually over the next few years, but the current more significant increase in property values would allow the city to accelerate that, he said.
Also, Cooke’s recommending reducing the portion that goes toward operations and maintenance from 62.84 cents to 59.65 cents, and lowering the amount toward debt reduction from 17.91 cents to 17.35 cents.
Since becoming city manager two years ago, Cooke has been working to shift to paying for such things as filling potholes, general street repairs and city facility improvements, rather than through debt financing.
“We’re growing, we’re going to continue grow,” Cooke said. “As the city ages, the city’s infrastructure ages as well. But we should be using more cash to maintain existing infrastructure and we should be using bonds and debt to build new projects, new capacity.”
Increasing the amount of money going to pay-as-you-go would generate about $10 million more and places that fund at $33.2 million, he said.
Of that, $24 million would be spent on street, bridges and transportation, $3.1 million on city facility maintenance and repairs, $2.5 million on technology, $2.5 million on neighborhood improvements geared at public safety issues, and $929,441 to be put in reserve for discretionary spending with community partners.
All told, the city plans to spend $418 million in capital improvement projects in the next fiscal year, which begins Oct. 1. It will spend $54.4 million on 2014 bond program projects. Voters approved $292 million in projects in that bond program.
Cooke also laid out a plan to spend $11.9 million in gas well revenues from the settlement of lawsuits against Chesapeake Energy and Total E&P USA over underpaid royalties on natural gas leases on city property.
Of that, $1.4 million will be used to increase the size of a planned library on East Lancaster Avenue from 1,500 square feet to 8,000 square feet, $1 million for new trails at Gateway and Quanah Parker parks on the east side, $2 million in sidewalk repair and new construction, and $5.4 million in technology upgrades, including the city’s telephone system to improve customer services.