HomeMy WebLinkAboutIR 10345 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10345
To the Mayor and Members of the City Council December 3, 2019
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SUBJECT: SALES TAX RATE OF FORT WORTH CRIME CONTROL AND
rrn PREVENTION DISTRICT
The purpose of this Informal Report is to address options and alternatives regarding the sales tax
rate of the Fort Worth Crime Control and Prevention District (the "District") and the possibility of
sales-tax capacity being reallocated to other purposes.
Currently the District imposes sales tax at a rate of one-half of one-cent (0.5¢). Both the District
and its sales tax will expire at the end of September 2020 unless voters approve their
continuation.
The law that governs crime control and prevention districts (Chapter 363 of the Texas Local
Government Code) mandates specific language that must be used on the ballot in continuation
elections and provides that those elections must be called by a district's board of directors. The
statutory ballot language speaks only to continuation of the district and the tax and their duration.
On November 12, the District's board of directors ordered an election for May 2020 for voters to
consider whether to continue the District and its sales tax for a period of ten years.
Chapter 363 does not provide a mechanism for adjusting the sales tax rate of a crime control and
prevention district, either as part of a continuation election or separately. Instead, adjustments to
the sales tax rate of a district are governed by Chapter 321 of the Tax Code.
Under the Tax Code, a district's board of directors can call an election to increase the district's
sales tax rate (within the limits for total local sales tax), but only the governing body of a
municipality — i.e., the City Council — can call an election to reduce a district's tax rate.
If in May 2020 voters approve the continuation of the District for ten years, the City Council could
call an election to ask voters to reduce the District's sales tax rate.
Because the District and City sales tax are both considered "municipal" taxes, they can be
considered together in a single ballot proposition. Thus, City voters might be asked to both
reduce the District's sales tax rate by any increment of one-eighth of one-cent (0.125¢) and
increase the general municipal sales tax by that same amount.
If there were interest in decreasing the District's sales tax rate and increasing the Fort Worth
Transportation Authority's ("FWTA") rate, two separate ballot propositions would be required
because the transportation tax is not a "municipal" tax and is instead governed by a different
chapter in the Tax Code as well as Chapter 452 of the Transportation Code. In addition, the
election on the FWTA rate would have to be called by its board of directors and occur throughout
its territory.
If you have any questions, please call Denis McElroy, Assistant City Attorney, at 817-392-2758.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS