Fort Worth proposed a smaller tax rate in 2024. However, it came with a caveat — the city will still collect more tax revenue from residents this fiscal year compared to last.
That’s because the proposed tax rate is above the no-new-revenue rate, which state legislators require taxing entities to produce to show residents how their taxes in the coming year compare to last. The no-new-revenue rate gained new attention this budget season after Fort Worth ISD and Tarrant County announced they would adopt a rate lower than the no-new-revenue rate — effectively lowering residents’ tax bill.
Fort Worth’s city manager and some council members defended the proposed tax rate Tuesday, calling attention to the expanded services the new tax revenue will provide. Cutting the tax rate would force the city to cut programs residents are clamoring for, City Manager David Cooke argued.
Using the no-new-revenue rate as a goal does not take into account the city’s growth and expanding needs, Cooke said. The city has never made it a goal to have a tax rate at or below the no-new-revenue rate, he added.
“It’s a revenue-side calculation that doesn’t have anything to do with cost,” Cooke said. “It has no relationship to the service level or the types of service we provide.”
The city would have to cut $40 million from the current recommended budget to achieve a no-new-revenue tax rate. If the city adopted the no-new-revenue rate, it would save the average property owners about $66 on their annual tax bill.
There are two places the city could reduce its tax rate. The first is the maintenance and operations budget, which funds all of the departments that keep the city running, such as police, parks and fire. The other is debt service, which allows the city to borrow and pay back debt for capital projects, such as new roads and parks, through bond programs. Voters approve the city taking on debt for bond programs during bond elections. The next bond election is scheduled for 2026.
Fort Worth ISD recently achieved its lowest tax rate in years by shaving two cents off the debt service rate, bringing the school district’s rate lower than the no-new-revenue rate. Board president Camille Rodriguez, the lone dissenting vote on the cut, said the cut went against the best interests of the district.
The county also lowered its rate below the no-new-revenue rate by shaving off three cents from 2023’s tax rate. The county is scheduled to vote Sept. 19 on its 2024 budget.
If the city reduces its debt service tax rate, it could put itself in a perilous financial position when taking out future debt to pay for bond programs, Cooke said. Mayor Mattie Parker echoed Cooke’s concerns.
“If you start tapping into the (debt service) side, you are completely cutting our knees off for the next bond,” Parker said.
Next year’s operations and maintenance budget includes several new and expanded programs that residents want and need, Cooke argued. Those include double the funding for the city’s priority repair program and more funding to address homelessness.
“Some of these things are the top things our residents are asking for and demanding,” Parker said. “Cut that $40 million and save the price of a cup of coffee per month for your resident, and I promise you in three months they will be screaming at you.”
The full list of new services created by the 2024 budget:
- Funding to include two neighborhoods in the city’s annual Neighborhood Improvement Program
- Provide more money for economic development incentives
- Double the funding for the city’s priority repair program
- Add more funding for homelessness services
- Create more benefits for city employees
- Increase city’s homestead exemption for residents that are over 65 and/or disabled
“It’s a way of delivering fair, equitable and good service(s),” Mayor Pro Tem Gyna Bivens said. “It’s very important not to get carried away on the themes, because when you repeat the themes of ‘no-new-revenue’ you really leave out the people.”
To get the tax rate below the no-new-revenue rate, Cooke said, the City Council would have to cut all those new programs and then some.
“What basic city services that we have right now are you going to cut? That would be messy. We could do that,” Parker said. “But don’t think you can do that without cutting public safety … and then you’re really in trouble.”
Newcomer Charlie Lauersdorf, who represents District 4 including parts of northeast Fort Worth, advocated for lowering the tax rate but said council was brought in too late to make meaningful cuts to the city’s budget to achieve a lower tax rate. Many of the programs that will benefit from more taxes don’t have a direct impact on his constituents, he argued.
“I don’t want to be that bad guy that goes after other districts who need these programs,” Lauersdorf said. “I wish we could have seen more packages, more choices along the way — not this late in the game.”
That’s how Tarrant County achieved one of its most significant tax cuts in years, Helen Giese, director of budget and risk management, said. County staff made it clear early in the budgeting process that departments would have to cut their costs, she previously told the Report.
“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.
The city and county are different; elected County Commissioners have more power to set the agenda for the budget. In Fort Worth, It’s the city manager’s job to present a budget he feels sets up the city for success, Parker said. Cooke’s budget strikes a balance between conservative budgeting and delivering the services residents need, Parker said.
“I make decisions that I can look at myself in the mirror 10 years from now and feel like I have set up the city for success,” Parker said. “It’s a balance.”
Rachel Behrndt is a government accountability reporter for the Fort Worth Report. Contact her at email@example.com 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.