After two years of rapid growth, the increase in property values ​​in Fort Worth is slowing – and the city must make tougher budget decisions.

This changing revenue landscape is reflected in City Manager David Cooke’s proposed budget for fiscal year 2025, which would increase the tax rate to 67.73 cents per $100 of assessed value — a 0.48 cent increase from last year. If approved, it would be the first time Fort Worth has increased its property tax rate since 1995.

A resident of an average Tarrant County home with a property tax exemption would face an increase in their city tax bill of about $60, staff estimates.

The property tax increase would fund a $1.062 billion general fund budget, a 4.8% increase over 2024, Cooke told council members in an Aug. 13 presentation. The main reasons for the increase are police and fire departments, merit pay increases, levy fund increases and MedStar’s transition to a fire department-based EMS system.

Camilo Diaz

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Fort Worth Report

Cooke told council members that the budget’s motto is to focus on the basics – maintaining current infrastructure and ensuring public safety while limiting the creation of new city employee positions.

“General fund growth this year is half of what it was last year,” he said. “Focusing on fundamentals also means narrowing our focus or discussion to basic government roles.”

One of the top priorities is fixing Fort Worth’s crumbling streets, a recurring complaint from residents in city surveys. The proposed budget includes an additional $9 million to repair aging streets through an increase in levy funds. Levy funds allow the city to finance projects with cash instead of taking on debt.

The budget will be Cooke’s last as he plans to retire next February. The longtime city manager said he hopes he leaves the city in a good position for years to come.

“I think we are in a good financial position and hope that this will be passed on to the next city manager,” he said after the meeting.

It is still uncertain whether the budget proposal will pass the council unscathed. The City Council has placed a high priority on reducing the tax rate in recent years, and last year Council members Alan Blaylock and Charlie Lauersdorf voted against the final tax rate because they felt it was too high.

During Tuesday’s budget preview, council members asked questions but did not indicate whether they supported the proposed tax rate.

Real estate value growth slows, interest rates rise

When the city council began crunching the numbers for the 2025 budget in April, it relied on figures from the Tarrant Appraisal District that estimated total tax revenue at about $129.7 billion. The council used a conservative estimate of $125.8 billion to plan and inform council members until the spring, when it announced it would increase the general fund budget by 3.5%.

But when the appraisal district certified its property tax rolls in July, that estimate had dropped significantly. Value appreciation for existing properties had dropped to a minimum in the months since April, although values ​​for new properties remained on target. Instead of a taxable value of $129.7 billion, discussions with appraisal staff confirmed that the city was looking at $121.6 billion.

“That’s a decrease of almost $4 billion from the number we used in June,” Cooke said. “And a $4 billion decrease in taxable net worth has implications for the resulting tax rate.”

Camilo Diaz

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Fort Worth Report

The declining property assessments come as the Tarrant Appraisal District prepares to overhaul residential property assessments. Under the new reassessment plan, approved on Aug. 9, the appraisal district will freeze residential property market values ​​in 2025, move to a two-year residential property assessment plan and set a 5% threshold to increase residential property values ​​in the future.

Any of these measures will lead to further stagnation in residential property values. Cooke told council members that he is not currently concerned about the impact of stagnant property values, but that it could become a problem if it continues for several years.

“If we have constant taxable income in the future, that will have a greater impact on future debt sustainability,” he said.

The money will be used to repair cracks, potholes and other road problems. Staff said it is intended to address historic underfunding of road maintenance due to growth and inflation.

But the increased funds for road maintenance could be the first to go if council members reject Cooke’s proposed tax rate. Other new costs, such as pay raises for police officers, are inevitable under the terms of the city’s soon-to-be-approved agreement with the police union, making the pay-as-you-go funds an easier target when push comes to shove.

“We would also look at various cuts across the general fund,” Cooke said. “The budget increased by almost $100 million last year and we did a number of new things. We added a second quarter to the neighborhood improvement program. We allocated more money for a number of things. So we would look at that list again and decide if we want to make those cuts.”

Preliminary costs for EMS system change announced

In May, the Fort Worth City Council made the historic decision to disband the long-standing MedStar ambulance service and transition to a fire department-based ambulance system. In this new system, the fire department will house personnel whose sole job is to respond to medical emergencies.

The initial cost of the new system will be covered in the 2025 budget. Cooke said the proposed budget includes $3.5 million in funding for the system starting in July of next year. Future costs will be paid through a newly established EMS system special fund that receives money from the general fund, as well as fees to neighboring cities that contract with Fort Worth for EMS services.

Some of the smaller cities have expressed concerns about how the change will affect their own residents and the budget process. Fort Worth staff are in the process of negotiating individual agreements for the service with each city.

The city is currently negotiating the terms of the transition with the IAFF 440 union, which represents firefighter employees. Issues on the table include job classifications, salary structures and capital infrastructure needs.

City council rejects proposal for $20 minimum wage

Despite vocal support from local unions and civic organizations, the city government continues to oppose a $20 minimum wage for city employees.

Instead, Cooke is proposing to raise the city’s minimum wage from $15.45 to $16.07, which would affect about 100 people currently employed by the city. Cooke told council members that the city is doing well in recruiting and retaining workers, especially when considering benefits, work environment and opportunities for advancement.

“I am confident that we are competitive in all salary brackets in the city of Fort Worth,” he said.

The city council also recommends funding a comprehensive salary study to evaluate Fort Worth’s current compensation structure. It would be the first comprehensive salary study since 2014, and staff estimates it would cost about $500,000.

Several council members were unhappy with the proposed minimum wage, including 8th District Councilman Chris Nettles. While he acknowledged that the city is under financial constraints, he urged the city administration to take another look at the issue and see how much more the wage could be increased.

Mayor Mattie Parker warned against making any significant changes to the minimum wage this budget period.

“I don’t think anyone at this table disputes that we want to take care of all of our employees,” Parker said. “I think we have very limited revenue this year, unfortunately, and so our job here at this table is to work with management and HR to get to what we can be most proud of as a body.”

This article first appeared in the Fort Worth Report and is republished here under a Creative Commons license.