HomeMy WebLinkAboutIR 0728INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 23-0728
To the Mayor and Members of the City Council
August 8, 2023
Page 1 of 2
SUBJECT: TRUTH IN TAXATION: SUBMISSION OF 2023 NO -NEW -REVENUE
AND VOTER -APPROVAL TAX RATES
This informal report has been prepared to inform the City Council of the 2023 no -new -revenue tax
rate ("NNRTR") and the voter -approval tax rate ("VATR") for use in the fiscal year 2024 budget
and financial planning discussions. This is a requirement under the truth -in -taxation concept,
found in the Texas Constitution and the Texas Tax Code.
The NNRTR reflects the rate which would generate the same revenue as the prior year based
solely on property that was taxable for both years. Pursuant to the Texas Tax Code, this rate is
calculated as shown:
(Last Year's Levy — Lost Property Levy)
(Current Total Value — New Property Value)
The VATR is the maximum tax rate that the City can adopt without an election. The VATR reflects
the sum of: (a) a maintenance and operations (M&O) rate of 3.5% above the NNRTR plus, (b) the
City's debt tax rate plus, (c) any unused increment. This concept is expressed mathematically as
follows:
VATR = (NNRTR M&O rate x 1.035) + current debt rate + unused increment rate
(The concept of unused increment became effective starting with the 2020 calendar year. The
available unused increment is the total difference, if any, between the VATR without any unused
increment and the adopted rate for each of the three preceding years.)
Property tax rates are comprised of two separate rates, Maintenance & Operation (M&O) and
Interest & Sinking (I&S). The M&O rate provides operating revenue for the General Fund while
the I&S rate provides resources to repay debt obligations through the General Debt Service Fund.
o The 2022 adopted tax rate is currently $0.712500 / $100 assessed valuation
o The 2023 no -new -revenue tax rate is $0.635374 / $100 assessed valuation
o The 2023 voter -approval tax rate without any unused increment is $0.679045 / $100
assessed valuation
o The 2023 voter -approval rate with all available unused increment is $0.766391
$100 assessed valuation
If the City Council were to adopt a tax rate that exceeds the VATR with all available unused
increment of $0.766391, that rate would need to be adopted before August 21st (78 days before
the next uniform election date) and would trigger an automatic election. No petition is required. If
the election were to fail, the City tax rate would default to the VATR. The August 21st deadline will
not apply to the City Manager's proposed rate.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 23-0728
To the Mayor and Members of the City Council
August 8, 2023
Page 2 of 2
SUBJECT: TRUTH IN TAXATION: SUBMISSION OF 2023 NO -NEW -REVENUE
AND VOTER -APPROVAL TAX RATES
The recommended tax rate will be published in accordance with legal requirements, and
additional information regarding the NNRTR and the VATR will be provided on request. The tax
rate is scheduled to be adopted on September 19, 2023, following a public hearing on that same
date.
If you have any questions, please contact Ashley Clement, Assistant Finance Director of FWLab,
at (817) 392-8505.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS