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Home My WebLink AboutIR 7443 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7443 �I,P T(R,O � �ATo the Mayor and Members of the City Council oEFORr, �/990 V�s rExPy, Subject: REVIEW OF AD VALOREM TAX EXEMPTION POLICIES roT� The last day the City Council may adopt (or change) the various local option percentage homestead exemptions is May 1 , 1990 in order to impact the 1990-91 budget year. Under state law property owners have until April 30 to apply for the various property tax exemptions offered by the City. Property owners apply for property tax exemptions through the Tarrant Appraisal District . Each December, property owners who have exemptions receive a notice confirming the exemptions . The exemptions for which Fort Worth citizens may apply are: a) GENERAL HOMESTEAD EXEMPTION; b) SENIOR CITIZEN EXEMPTION; c) DISABLED CITIZEN EXEMPTION; and d) DISABLED VETERAN EXEMPTION. PROPERTY TAX EXEMPTIONS Following is a summary of ad valorem tax exemption policies allowed by the State of Texas : a) GENERAL HOMESTEAD EXEMPTION - optional homestead exemption of not less than $5 ,000 and not to exceed 20% of market value (currently set at 20% for Fort Worth citizens) ; b) SENIOR CITIZEN EXEMPTION - local-option homestead exemption of not less than $3,000 of assessed value for the homestead of senior property owners , 65 or older (currently set at $40 ,000 for Fort Worth senior citizens) ; c) DISABLED CITIZEN EXEMPTION - local-option homestead exemption of not less than $3 ,000 of assessed value for the homestead of disabled property owners , who are 100% disabled and unable to work due to their disability as determined by Social Security standards and confirmed by a physician (currently set at $10 ,000 for Fort Worth disabled citizens) ; d) DISABLED AND DECEASED VETERAN EXEMPTION - an exemption up to $3 ,000 for disabled veterans or the surviving spouse and minor children of a disabled veteran; only veterans with a service related disability are eligible, which must be confirmed with a letter from a Veterans Association (VA) . (current disabled veteran exemption rates as set by state law are listed below) 10% - 30% disability $1 , 250 exemption 31% - 50% disability $2 ,000 exemption 51% - 70% disability $2 . 500 exemption 71% - 100% disability $3 ,000 exemption ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS - INFORMAL REPORT TO CITY COUNCIL MEMBERS No.— 7443— �paTtq, ��gFOpr�o To the Mayor and Members of the City Council tz xrexA�= Subject: REVIEW OF AD VALOREM TAX EXEMPTION POLICIES All property Owners may apply for the GENERAL HOMESTEAD EXEMPTION for their residence homestead but not for additional properties owned including property rented for tenant residence. Property owners may apply for the GENERAL HOMESTEAD EXEMPTION and DISABLED VETERANS EXEMPTION in addition to the SENIOR CITIZEN EXEMPTION or DISABLED CITIZEN EXEMPTION . Disabled citizens who are also 65 or older may not receive both the SENIOR CITIZEN EXEMPTION and DISABLED CITIZEN EXEMPTION but may choose either. Exemptions may be adopted either: a) by the City Council ; or b} by a favorable vote of a majority of the qualified voters of the City at an election called by the City Council . The City Council may call the election on the petition of at least 20% of the number of qualified voters who voted in the preceding City election. AVERAGE TAX BILL IN FORT WORTH In Fort Worth the average tax bill for persons claiming only a GENERAL HOMESTEAD EXEMPTION is $462 . 93 {based on an average homestead value of $64,367} . The average tax bill for persons claiming a general exemption and an over 65 exemption is $103 . 33. These figures do not include rental property, they are for homeowners only. The following two tables illustrate the total appraised value lost and the total revenue lost to property tax exemptions. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 744-4 µ,,P T f pro bFOPP To the Mayor and Members of the City Council ra G. Subject: REVIEW OF AD VALOREM TAX EXEMPTION POLICIES +et) BREAKDOWN OF AD VALOREM TAX ROLL APPRAISED VALUE LOST TO VARIOUS EXEMPTIONS 1988-89 1989-90 as of 2/89 as of 2/90 TOTAL APPRAISED VALUE OF TAX ROLL $17 , 302 ,348 ,355 $17 ,472, 621 ,950 APPRAISED VALUE LOST TO EXEMPTIONS: GENERAL HOMESTEAD $869,600 , 681 897 ,710 , 912 SENIOR CITIZEN 775, 528 ,225 793,002 ,691" DISABLED CITIZEN 14 ,880 , 240 12, 501 ,102 DISABLED AND DECEASED VETERAN 5,648 , 268 5,693,260 --------------- --------------- TOTAL APPRAISED VALUE LOST $1 , 665,657 , 414 $1 ,708, 907 , 965 BREAKDOWN OF AD VALOREM REVENUE LOST TO VARIOUS EXEMPTIONS 1988-89 1989-90 as of 2/89 as of 2/90 TAX RATE/$100 ASSESSED VALUATION $0 .856 $0 . 899 REVENUE LOST TO EXEMPTIONS; GENERAL HOMESTEAD $7 ,443,781 . 83 $8,070 ,421 . 10 SENIOR CITIZEN 6, 638 , 521 . 51 7 , 129 ,094 . 19 DISABLED CITIZEN 127 ,374. 85 112 ,384. 91 DISABLED AND DECEASED VETERAN 48,349. 17 51 , 182 . 41 -------------- -------------- TOTAL REVENUE LOST $14, 258 ,027 . 46 $15,363,082 . 61 ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 744.1 a.'�V' t A, To the Mayor and Members of the City Council X REVIEW OF AD VALOREM TAX EXEMPTION POLICIES Subject CITIZEN EXEMPTION The City Council recently heard from disabled citizens requesting that the DISABLED CITIZEN EXEMPTION be increased from $10 ,000 to $40 ,000 comparable to the exemption level offered to citizens over 65 years of age. Following is a breakdown of the impact on revenue due for each additional $10 ,000 exemption which might be proposed for disabled citizens . COMPARISON OF REVENUE LOST AND REVENUE RECEIVED DUE TO DISABLED CITIZEN EXEMPTION (as of 3/90) RATE OF ADDITIONAL CUMULATIVE DISABLED REVENUE REVENUE EXEMPTION LOST LOST $10 ,000 $112 , 384 . 91 20 ,000 $ 94,184.44 206 ,569. 35 30 ,000 60 ,744. 68 267 ,314.03 40 ,000 36, 966. 21 $304 , 280. 24 ----------- TOTAL $191 ,895 . 33 It is important to note, that it is difficult to absolutely identify how much each $1 ,000 or $10,000 increase in exemption will impact total revenue by using a simple mathematical formula, due to the diversity of property valuations and combinations of the various exemptions . For example, over 20,000 out of 68 , 655 resident homestead properties in the City of Fort Worth have an assessed property value of less than $30 ,000 . A resident homestead with a Market Value at $28,000 with GENERAL HOMESTEAD, DISABLED CITIZEN and 100% DISABLED VETERAN exemptions has a Net Taxable Value of $9 , 400 ($28,000 - 20% - $10 ,000 - $3,000 = $9, 400) . If the DISABLED CITIZEN exemption is increased by $10 ,000 the Net Taxable Value becomes $0 .0 ($28 ,000 - 20% - $20 ,000 - $3 ,000 = $0) . Therefore the potential value lost from increasing the DISABLED CITIZEN exemption for this homestead is $9,400 and not $10,000 , which results in a different amount of revenue loss for each proposed $10 ,000 increase in the DISABLED CITIZEN exemption. This decrease in value by $9,400 represents a decrease of $84 . 51 in the taxes for this property if the DISABLED CITIZEN exemption was increased to $20 ,000 . 0001k [ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No.- 7443 OPP To the Mayor and Members of the City Council 0 Subject: REVIEW OF AD VALOREM TAX EXEMPTION POLICIES fara CITY TAX EXEMPTIONS FOR TEXAS CITIES --------------------TYPE OF EXEMPTION---------------- CITY GENERAL OVER 65 DISABLED DISABLED/DECEASED VETERAN Amarillo -0- $8,600 $6,000 $1 ,500 - 3 ,000 Arlington 20% 50,000 50 ,000 $1,500 - 3,000 Austin -0- 51,000 51 ,000 $1, 500 - 3,000 Corpus Christi 10% 50 ,000 50 ,000 $1,500 - 3 ,000 Dallas 20% 64,000 64 ,000 $1 ,500 - 3,000 El Paso $5 ,000 15,000 15,000 $1 , 500 - 3 ,000 Fort Worth 20% 40 ,000 10 ,000 $1 , 500 - 3 ,000 Houston 20% 37 ,000 37 ,000 $1 ,500 - 3 ,000 Lubbock -0- 16,700 10 ,000 $1 , 500 - 3 ,000 San Antonio -0- 60 ,000 -0- $1,500 - 3,000 NOTES: Where cities have elected to exercise the GENERAL HOMESTEAD EXEMPTION option, state law requires that homestead exemption be set not less than $5,000 and not to exceed 20% of market value. Under state law the GENERAL , OVER 65 and DISABLED exemptions are optional ; however, the DISABLED/DECEASED VETERAN exemption is required state-wide for disabled veterans or the surviving spouse and minor children of a disabled veteran. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7443 To the Mayor and Members of the City Council Subject* REVIEW OF AD VALOREM TAX EXEMPTION POLICIES 1613 SUMMARY The City of Fort Worth's GENERAL HOMESTEAD and SENIOR CITIZEN exemptions are comparable to the exemption levels offered by other major Texas cities . The City of Fort Worth's DISABLED CITIZEN exemption is on the low end of exemptions offered by other major Texas cities electing to offer this option . In fact , the City of Fort Worth DISABLED CITIZEN rate of $10,000 is tied for third lowest out of the ten major Texas cities surveyed. The DISABLED AND DECEASED VETERAN exemption is required by state law and cannot be changed by the City Council . The last day the City Council may adopt (or change) the various local option percentage homestead exemptions in order to impact the 1990-91 budget year is May 1, 1990 . Staff is available to provide additional information if the City Council finds it desirable to change any of the optional exemptions or investigate the desirable exemption rates, especially the DISABLED CITIZEN exemption. Nevertheless , property owners only have until April 30 to apply for the various property tax exemptions offered by the City for the next tax year. David Ivor City Mana [ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS