July 22, 2024

Setting the property tax rate is without a doubt one of the most discussed – and debated – issues during the budget process by the City Council as well as City staff.

Why it matters: Revenue generated from the tax largely funds the costs to operate the City and other essential local services.

  • When residents pay their property tax bills, they fund several different entities such as school districts, their home counties, and the City of Fort Worth.
  • The City property tax rate only represents a fraction of what residents pay.At issue is striking a balance between collecting enough revenue to keep improving the City without placing an undue tax burden on property owners.Beyond the tax rate itself, discussion also goes into how to spend tax revenue. The City of Fort Worth property tax rate is allocated (or divided) into three buckets:
  • Maintenance & Operations (M&O) – Monies used to pay day-to-day costs of the City, including Police and Fire department operations, City administrative staff, and parks services.
  • Pay-As-You-Go (PayGo) – A subcategory of Maintenance & Operations introduced in FY15 to move away from using debt to fund smaller capital items. PAYGo funds small-scale projects, equipment or other capital purchases paid with cash.
  • Interest & Sinking (I&S or debt) – Funds used to repay money that has been borrowed for major capital projects and infrastructure.By the numbers: Fort Worth’s tax rate in Fiscal Year 2024 is 67.25 cents per $100 assessed valuation.
  • Of every dollar, 45.5 cents is designated for operations, 7 cents for PayGo, and 14.75 cents to pay debt.
  • The 2024 property tax rate will generate $736 million of revenue for the City, of which $574 million is applied to M&O, also referred to as the General Fund.As more people and businesses come to call Fort Worth home, generating more property tax revenue, it’s not uncommon for the tax rate to fall. The City Council doesn’t want property owners to pay any more taxes than need be, and in 2024, the tax rate fell 4 cents from the prior year as a result of significant growth in property and other revenue sources.In 2019, the Texas Legislature passed laws requiring taxing entities such as the City of Fort Worth to be transparent about the revenues certain tax rates would generate.
    • The City is required, for example, to report the No-New-Revenue Tax Rate (NNR), or the rate needed to generate the same amount of revenue as the prior year on the same properties. 
    • The Voter-Approval Tax Rate (VAR) allows for a 3.5% revenue increase on existing properties.
    • Unlike the NNR, the VAR serves as a firm limit on taxing entities. A tax rate above the VAR must be ratified in a local election.

Fort Worth periodically receives estimated property values prior to the delivery of final valuations used in the property tax rate adoption each year. City staff models various tax rate scenarios and allocations to the three buckets before making a recommendation to the City Council.