HomeMy WebLinkAboutIR 7521 INFORMAL REPORT TO CITY COUNCIL MEMBERS NO. 7521
0 April 2 , 1991
;5.j 5-0P To the Mayor and Members of the City Council Page I of 4
@ 0 Ue
?ix Subject: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES
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State laws governing property tax administration provide for certain
exemptions which may either partially or totally exempt real or personal
property from taxation. Some exemptions require only that property meet
certain criteria before the appraisal district may grant the property owner's
application for exemption. Other exemptions require specific action by the
taxing authority before the exemption may be requested by the property owner.
Those exemptions currently being claimed by Fort Worth property owners and
over which the City Council exercises no discretionary power are: AGRICULTURE
EXEMPTION, "FREEPORT EXEMPTION", DISABLED VETERANS EXEMPTION, SCENIC LAND
EXEMPTION, and SOLAR AND WIND POWERED ENERGY DEVICES EXEMPTION. The "Freeport
Exemption" was authorized by the 71st Legislature in 1989 to become effective
January 1, 1990 unless the governing body took action prior to that date to
revoke the exemption for that particuliar entity. The City Council chose not
to take such action and the exemption is currently effective in Fort Worth.
OPTIONAL TAX EXEMPTIONS
The local option exemptions currently being claimed by property owners in Fort
Worth are as follows:
GENERAL RESIDENCE HOMESTEAD EXEMPTION - exemption of not less than $5,000 and
oW not to exceed 20% of appraised value (will remain at current level of 20% for
Fort Worth citizens unless other action is taken by City Council prior to May
1).
SENIOR CITIZEN HOMESTEAD EXEMPTION - in addition to the General Residence
Homestead Exemption for 65 or older property owner, an exemption of $3,000 of
appraised value or larger if larger amount is established by the governing
body or by voters (will remain at current level of $40,000 unless revoked or
increased by City Council)
DISABLED HOMESTEAD EXEMPTION - exempts 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 (increased by City Council from $10,000
to current $20,000 for 1990 tax year and will remain at this level unless
amended by the City Council prior to May 1).
HISTORIC SITES EXEMPTION - exemption of part or all of assessed value of
property designated by the Texas Historical Commission or local governing body
as an exempt historical site. (Practice by Fort Worth City Council has been
to exempt increase in value resulting from renovation or preservation of a
disinated historical site - each site is presented to Council on an individual
basis. )
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL. REPORT TO CITY COUNCIL. MEMBERS No. 7521
n+r,, April 2 , 1991
mac to � To the Mayor and Members of the City Council Page 2 of 4
y
.r,x* Subject: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES (continued)
COMPARISON OF CERTAIN TAX EXEMPTIONS IN TEXAS CITIES
TYPE OF EXEMPTIONS*
RESIDENCE HOMESTEAD FREEPORT
GENERAL SR. CITIZENS DISABLED
Arlington 20% $50,000 $50,000 yes
Austin None $51,000 $51,000 no
Dallas 20% $64,000 $64,000 no**
E1 Paso None $15,000 $15,000 yes
Fort Worth 20% $40,0001 $20,000 yes
Houston 20% $32,340 $32,340 no
San Antonio None $60,000 None yes
* Historic site exemptions not included due to lack of information.
** Implementation for 1990 revoked by Dallas City Council but will become
effective for 1991 tax year.
AVERAGE TAX BILL OF A HOMESTEAD IN FORT WORTH
The average value of a single-family residence in Fort Worth is $52,420 for
the 1990 tax year. The impact that the various optional exemptions could have
on property of this value is as follows;
City
Exemptions Tax
none $471.26
Gen. Homestead $377.00
Sr. Citizen w/Gen. Homestead $ 17.40
Disabled Homestead $197.20
(note: homeowner cannot claim both Sr. Citizen and Disabled exemptions)
The amounts of assessed value and tax revenue lost due to exemptions in Fort
Worth are presented on the tables that follow.
[ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS ---
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7521
+'AT[U, April 2 , 1991
;o4EaRroo To the Mayor and Members of the City Council page 3 of 4
�raxRy� Subject: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES (continued)
ASSESSED VALUE LOST TO EXEMPTIONS
(000'S OMITTED)
1989-90 1990-91
TOTAL ASSESSED VALUE $19,495,928 $17,462,547
Value Lost to Exemptions:
General Residence Homestead 916,430 931,300
Senior Citizen Homestead 797,174 793,783
Agriculture 642,200 537,981
"Freeport Goods" -0- 432,330
Disabled Residence Homestead 13,328 25,936
Scenic Land -0- 19,431
Disabled Veterans 5,688 5,713
Historic Sites -0- 839
Solar & Wind Powered Energy Devices -0= 14
Total Value Lost $ 2,374,820 $ 2,747,327
ESTIMATED REVENUE LOST TO EXEMPTIONS
(O00'S OMITTED)
General Residence Homestead $ 7,992 $ 8,121
Senior Citizen Homestead 6,952 6,922
Agriculture 5,600 4,691
"Freeport Goods" -0- 3,770
Disabled Residence Homestead 116 226
Scenic Land -0- 169
Disabled Veterans 50 50
Historic Sites* -0- 7
Solar & Wind Powered Energy Devices -0= -0-
Total Revenue Lost $ 20,710 $ 23,956
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS ---
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7521
SO*),'* To the Mayor and Members of the City Council April 2, 1991
Page 4 of 4
Subject: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES (continued)
SUMMARY
The City of Fort Worth is the only surveyed Texas city which allowed both the
General Residence Homestead and "Freeport Goods" exemption for the 1990 tax
year. Those cities which have adopted the General Homestead exemption are all
at the maximum rate of 20% of assessed value. This may not be increased;
however, it is subject to reduction by Council action. The Fort Worth Senior
Citizen exemption compares favorably with the average of the other Texas
cities. This may be adjusted up or down if the Council should desire to amend
this exemption. Although increased from $10,000 to $20,000 for the current
year, Fort Worth's exemption for disabled homeowners continues to be the
lowest among the surveyed cites which provide this exemption at the same level
of that for Senior Citizens. Similiar action in Fort Worth would raise the
Disabled exemption to $40,000 which would reduce tax revenues by approximately
$220,000.
The last day the City Council may change the various local option homestead
exemptions in order to impact the 1991-92 budget is April 30, 1991. Staff is
00 1 11 available to provide additional information if the Council should require it .
Property owners have until April 30th to apply for the various property tax
exemptions currently offered by the City for the 1991 tax year. A number of
additional exemptions have been proposed to the 72nd Texas Legislature;
however, if any of these should be authorized no possible impact would occur
until the 1992 tax year.
David Ivory
City Manager
[ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS