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Home My WebLink AboutIR 8059 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8o5c) T To the Mayor and Members of the City Council March 25, 1997 Subject: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES State laws governing property tax administration provide for certain exemptions that 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. Those exemptions currently being claimed by Fort Worth property owners and over which the City Council exercises no discretionary power are: AGRICULTURE, FREEPORT, DISABLED VETERANS, SCENIC LAND, SOLAR AND WIND POWERED ENERGY DEVICES, POLLUTION CONTROL DEVICES, AND FOREIGN TRADE ZONE. The City Council has the option, on an annual basis, to increase or decrease certain exemptions presently being claimed by property owners in Fort Worth. These "local option" exemptions include: GENERAL RESIDENCE HOMESTEAD EXEMPTION - exemption of not less than $5,000 and not to exceed 20 percent of appraised value (will remain at current level of 20 percent 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 the aged 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 1.00 percent disabled and unable to work due to their disability as determined by Social Security standards and confirmed by a physician (will remain at cur-rent level. of $40,000 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 designated historical site - each site is presented to Council on an individual basis.) OFINIA1 RECORD CITY SECRUARY I FFT. WORTIt TEL INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8059 To the Mayor and Members of the City Council March 25, 1997 40� Page 2 of 4 }EXI.4 Subject: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES TRANSITIONAL HOUSING FOR INDIGENT PERSONS - exempts residential property owned by the United States or an agency of the United States and used to provide transitional housing for the indigent under a program operated or directed by the U.S. Department of Housing and Urban Development. (The Community Enrichment Center, Open Arms Home, Inc., and Women's Haven of Tarrant County are currently cooperating with HUD to provide a comprehensive transitional housing program for Tarrant County homeless families. These organizations leased 41 properties from HUD in 1996 that are in Fort Worth. The City Council has approved this exemption for 1996. The estimated tax revenue loss for the 1996-97 budget is $20,025.) A comparison of various tax exemptions in selected Texas cities is outlined below: RESIDENCE HOMESTEAD EXEMPTIONS Freeport Transitional General Sr. Citizen Disabled Exemption Housing Arlington 20% $50,000 $50,000 no yes Austin none $51,000 $51,000 yes no Dallas 20% $64,000 $64,000 yes no El Paso none $15,000 $15,000 yes no Fort Worth 20% $40,000 $40,000 yes yes Houston 20% $32,340 $32,340 no no San Antonio none $60,000 none yes yes The average value of a single-family residence in Fort Worth is $53,064 for the 1996 tax year. Since the 1996 tax rate is $0.95/$100 value, the impact the various optional exemptions have on property with an average value, as well as property of greater and lesser values, is listed below: 1996 City Taxes on a House with a Value of: Exemption $53,064 $30,OOQ U�000 No exemption $504.11 $285.00 $760.00 Genera„ homestead 403.29 228.00 608.00 Sr. Citizen w/general homestead 23.29 -0- 228.00 Disabled homestead* 23.29 -0- 228.00 Indigent housing -0- -0- -0- *Homeowner cannot claim both Senior Citizen and Disabled exemption. IRA, A% INFORMAL REPORT TO CITY COUNCIL MEMBERS No.- 8059 T March 25, 1997 To the Mayor and Members of the City Council Page 3 of 4 X Subject: AD VALOREM TAX EXEMPTION POLICIES AND 1873 PRACTICES The amounts of assessed value and tax revenue lost due to exemptions are presented on the following tables: ASSESSED VALUE LOST TO EXEMPTIONS FY 1996-97 FY 1995-96 Total assessed value: $17,928,217,672 $16,594,714,000 Value lost to exemptions: general residence homestead 1,071,743,571 1,037,982,000 senior citizen homestead 761,753,094 764,299,000 agriculture 247,933,106 189,244,000 fi-eeport goods 913,932,769 861,229,000 disabled residence homestead 57,673,795 55,769,000 scenic land 3,517,779 1,989,000 disabled veterans 30,947,111 8,091,000 historic sites 3,303,595 2,964,000 solar/wind energy devices 13,886 14,000 abatements 192,105,983 84,000,000 indigent housing 2,107,900 2,378,000 pollution control devices 1,066,627 1,076,000 foreign trade zone 343,179,857 -0- Total value lost to exemptions $3,629,279,073 $3,009,035,000 Net assessed value (as of September) $14,298,938,599 $13,585,679,000 REVENUE LOST TO EXEMPTIONS FY 1996-97 FY 1995-96 General residence homestead* $10,181,564 $10,000,957 Senior citizen homestead* 7,236,654 7,364,021 Agriculture 2,355,364 1,823,366 Freeport goods 8,682,361 8,297,94 ....... Disabled residence homestead* 547,901 537,33 OFFICIAL RECORD Scenic land 33,419 19,16 CITY SECREIThRY Disabled veterans 293,998 77,95 Historic sites* 31,384 28,55 FT WORTWI Solar/wind energy devices 132 -0- ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS NO. 8059 Boa T To the Mayor and Members of the City Council March 25, 1997 Page 4 of 4 Subject: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES REVENUE LOST TO EXEMPTIONS (continued) FY 1996-97 FY 1995-96 Abatements* 1,825,007 809,340 Indigent housing* 20,025 22,912 Pollution control devices 10,133 10,367 Foreign trade zone 3,260,209 -0- Total revenue lost to exemptions $34,478,151 $28,991,917 *Discretionary Property owners have until April 30'h to apply for the various property tax exemptions currently offered by the City for the 1.997 tax year. The last day the City Council may change the various local option homestead exemptions in order to impact the FY 1997-98 budget is April 30, 1997. Staff is available to provide c' additional information if the City Council should require it. Bob Terrell City Manager (P ISSUED BY THE CITY MANAGER— FORT WORTH,TEXAS