Your property tax bill could be lower in 2024. Here’s what you need to know about proposed tax rates

Several Fort Worth taxing entities adjusted taxing policies that could mean hundreds of dollars in savings to Fort Worth taxpayers in the 2024 fiscal year.

Property tax savings are historically hard to achieve in Texas. Now, thanks to every Fort Worth taxing entity reducing tax rates, new exemptions passed for homeowners and a statewide $18 billion tax relief package — your tax bill may be lower in 2024.

In fact, the Fort Worth homeowner with a homestead exemption and the average market value home will pay about $643 less in property taxes next fiscal year compared with 2023, pending voter approval of a new school district exemption.

The state only levies two of the three typical taxes that make up tax income — sales and property taxes. Texas is one of seven states to not have an income tax.

As property values rise precipitously, so do property taxes — even as taxing entities reduce their rates.

The savings partially fulfill campaign promises locally and a pledge from state lawmakers who promised to create savings for taxpayers through school district property tax bills, which typically make up the bulk of taxpayers’ payment.

Gov. Greg Abbott signed a tax cut package in July, lowering the school district’s property tax rate and increasing the state-mandated homestead exemption from $40,000 to $100,000, which voters will have to approve in November before it goes into effect.

“One of the good things about the increase in the homestead exemption is that it’s permanent,” James Quintero, director of the Center for Local Governance at conservative think tank Texas Public Policy Foundation. “Because what voters are doing in November is affirming or rejecting, including this provision in the Texas constitution.”

Tarrant County also paved the way for significant cuts to the county’s portion of resident’s tax bills. The Tarrant County Commissioners Court approved a new homestead exemption for county taxpayers and adopted a no-new-revenue tax rate. A move Quintero applauds.

“It’s going to benefit taxpayers in a lot of really great ways,” Quintero said. “Unfortunately, they are one of the few, if not the only entity in the state, that is taking such a pro taxpayer posture.”

What is a fiscal year?

A fiscal year is a one-year period that taxing entities use for financial reporting and budgeting. Fort Worth and Tarrant County’s fiscal year starts Oct. 1 and ends Sept. 30.

Most Fort Worth residents pay taxes to a series of entities, including the city of Fort Worth, Tarrant County, the Tarrant Regional Water District, the Tarrant County Hospital District (JPS Health Network), Tarrant County College and Fort Worth ISD.

There are 12 school districts in Fort Worth. Every school district will adopt the $100,000 homestead exemption if voters approve it in November.

Every taxing entity is required to produce a no-new-revenue rate, which is the rate that would produce the same amount of income if applied to the same properties taxed in both years, and a voter-approved tax rate, which is the maximum rate allowed by law without voter approval. Then, the entity determines its suggested tax rate.

All of these jurisdictions determine their own tax rate, and those tax rates culminate in a final tax bill residents receive in October.

Most of Fort Worth residents’ tax bill is paid to the school district. However, with money from the state, the city of Fort Worth rates a close second in fiscal year 2024.

Fort Worth

Fort Worth’s proposed 2024 budget is nearly $2.6 billion.

The budget calls for lowering the city’s tax rate by 4 cents, to $0.6725 per $100 assessed value. The proposed rate could change before the budget is finalized in September. The city’s budget is split into three parts — operations and maintenance, PAYGo and debt service.

What is PAYGO:

Pay As You Go, or PAYGO, is the city of Fort Worth’s general fund cash used for some operations and capital programs, such as infrastructure improvements.

Fort Worth will collect about 9.2% more taxpayer funds in 2024, totaling about $65.2 million. About one-third of the new income will come from new property added to the tax roll this year.

Fort Worth’s average home value is $318,653 as of July 2023. Just $228,211 is taxable value. That homeowner would pay $1,227.76 in taxes to the city, with the city’s 20% homestead exemption. Without the homestead exemption applied, that resident’s tax bill would jump to $1,534.

The city reduced its operations budget, which finances departments like parks and recreation, code compliance and fire and police, by four cents.

“This is the largest property tax rate reduction in real terms, and in percentage, in at least the last 30 years,” Cooke said.

Last year, the city increased its Pay As You Go budget, which serves as funding for capital projects like roads and street lights. That led to a reduction in waiting periods for street light repairs and pavement markings.

The city also approved a new property tax exemption for elderly and disabled property owners, increasing their exemption from $40,000 to $60,000.

Tarrant County and JPS

Tarrant County made history this year after proposing a tax rate below the no-new-revenue rate. That means that the county will collect about $16.3 million, or 3% less property tax revenue in fiscal year 2024 than it did in 2023.

Property owners will pay $0.1945 per every $100 of valuation, a three-cent reduction from the current tax rate. About $9.94 million of the county’s $488.1 million in expected revenue will come from new property added to the tax roll this year.

Last year’s county budget was also out of the norm, falling above the county’s no-new-revenue rate. This year, county staff formed the 2024 budget with reduced revenue in mind, Helen Giese, director of budget and risk management, said.

“In January, we were working toward making sure that departments understood that there was going to be possibly more constraints with revenues coming in,” Giese said.

New County Judge Tim O’Hare, who was sworn in January, said on the campaign trail he would strive for a 20% cut to the county’s tax rate; the county fell just about one cent short of a 20% reduction. He recently celebrated the new tax rate at the annual state of the county speech.

The county’s compressed tax rate and newly passed homestead exemption accounts for the reduction in revenue, Giese said. Despite the significant reduction, no one department will feel the brunt of cost cutting. That’s because every single department presented a budget proposal that cut costs.

“It was just a matter of five-dollaring it to death all over the place,” Giese said.

Fort Worth’s average homeowner would pay $399.48 in taxes to the county, with the county’s 10% homestead exemption. Without the homestead exemption applied, that resident’s tax bill would jump to $443.

Tarrant County also partially took the reins of JPS Health Network, passing a 10% homestead exemption and requiring the JPS board to pass a tax rate that does not exceed $0.1945 per $100 of assessed value. The commissioners previously unanimously rejected the board of manager’s proposed tax rate of $0.224 per $100 of assessed value to fund a $1.54 billion operating budget.

That maximum rate will also fall below the hospital district’s no new revenue rate. JPS’ Finance, Planning and Investment committee will meet Aug. 24 and the board of directors’ next meeting is scheduled for Sept. 14.

County Commissioners Court will hear another budget presentation with the new tax rate direction before final approval, Commissioner Roy Brooks previously told the Report.

Fort Worth ISD

Fort Worth ISD taxpayers will see the most significant reduction in their tax bill before and after homestead exemptions are applied following the legislature’s recently passed property tax relief package.

Fort Worth’s average homeowner would pay $1,362.11 in taxes to the school district, with the state mandated $100,000 homestead exemption. Without the homestead exemption applied, that resident’s tax bill would jump to $2,424.51 — a savings of $1,062.

The increased homestead exemption, still to be approved by voters, will make up about half of the property tax relief for residents across the state, Quintero said.

The budget, which the board of trustees approved in June, is not balanced. The district will spend $45 million more than it expects to receive in revenue, dipping into $338 million in reserves to cover the deficit.

About $17.3 million of the school district’s 2024 budget will go toward 3% employee raises across the district.

Trustees approved a $1.0624 per $100 of valuation Tuesday, cementing a lower tax rate and completing the first step to achieving hundreds of dollars in property tax relief. The trustees approved the rate after lowering the district’s debt service rate by two cents.

“Our property values in Tarrant County, especially in Fort Worth ISD, have gone up more than expected. Potentially, there is an opportunity to lower this (debt service) rate and do right by a lot of the families who live here and send their kids to school here as well as the taxpayers,” Trustee Kevin Lynch, who proposed the reduction, said.

Tarrant Regional Water District and Tarrant County College

Tarrant Regional Water District and Tarrant County College make up the smallest proportion of Fort Worth resident’s tax bill, just about 6% in 2024.

Tarrant Regional Water District proposed a reduced tax rate of $0.0267 per $100 of valuation.

Still, the water district expects to collect an additional $9 per taxpayer in property taxes in 2023. The money primarily will be used to maintain existing flood mitigation infrastructure, such as levies and reservoirs.

The water district adjusted its budget to include $3.45 million to the general fund to pay for creating trails and other costs related to maintaining the Trinity Trail system. Environmental stewardship programs such as the trash bash cleanup and open space conservation also will be moved to the general fund.

Fort Worth’s average homeowner would pay $60 in taxes to the water district, the water district does not have a homestead exemption.

Tarrant County College proposed a tax rate of $0.11217 cents per $100 of valuation, two cents lower than the 2023 tax rate. The TCC board of trustees also approved a $5,000 homestead exemption.

In addition, trustees approved a tuition raise and expect an increase in funding from the state.

Fort Worth’s average homeowner would pay $250 in taxes to the college district, with the newly approved $5,000 homestead exemption. Without the homestead exemption applied, that resident’s tax bill would jump to $255.

How do I know what my tax bill might be?

Residents can calculate their proposed tax bill by taxing the taxable value of their home, minus any exemptions multiplied by the proposed tax rates from every taxing entity.

For example:

Here is the average tax bill before and after factoring in homestead exemptions.

Rachel Behrndt is a government accountability reporter for the Fort Worth Report. Contact her at rachel.behrndt@fortworthreport.org or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.