Struggling with substantial reductions in funding due to declining income levels, Fort Worth grapples with tough financial decisions.
Fort Worth, Texas, is navigating its adopted fiscal year 2025 budget amidst increasing expenditures and decreasing revenues. Salary and benefits account for a significant 35.6% of the budget.
The city's strategy to maintain financial stability is centred on economic growth, careful expenditure control, and leveraging development opportunities. Fort Worth benefits from a robust industrial and business environment within the Dallas-Fort Worth (DFW) metroplex, with substantial industrial construction and the attraction of large tenants like Amazon and McMaster-Carr.
The DFW industrial market is shifting towards more tenant-focused and flexible facilities, fostering a resilient, demand-aligned real estate market. This balanced approach prevents oversupply and maintains property values, indirectly supporting the city’s property tax revenues, a critical revenue source for local governments.
Population growth and business expansion in the DFW region contribute positively to local economies, including Fort Worth, supporting sales tax revenues and economic vitality crucial for municipal budgeting. Fort Worth's relatively moderate rent prices compared to national averages also support a stable residential base, which is important for consistent property tax collections and demand for city services.
As Fort Worth city staff work to balance the fiscal year 2026 budget, they are facing challenges such as lower property tax revenue projections due to a reappraisal plan that froze residential property values for 2025. Departments have been asked to cut at least 1% from their respective budgets, which would generate nearly $7.6 million in savings.
City staff is working to shrink a projected $16.7 million deficit in the fiscal year 2026 budget, which is forecasted to have $1.1 billion in expenses. Council members unanimously approved a flat tax rate in 2024, after the City Manager proposed raising it for the first time since 1995.
Looking ahead, budget balancing is expected to become increasingly challenging due to the need to adapt to new legislation and changing financial circumstances. City officials are considering measures such as creating a new street maintenance fee, considering changes to city compensation and benefits, as well as utility fees, to offset expenses.
Budget planning is a year-round effort in Fort Worth. City leaders emphasise the importance of maintaining essential services while deferring non-critical expenditures and increasing efficiencies through better procurement and service delivery modernization. They also seek state and federal grants or bond financing for infrastructure and capital projects, and encourage economic activities that broaden the tax base, including commercial development and incentivising business growth.
In the face of these financial challenges, city leaders are reminded of the long-term implications of cost-cutting measures. For instance, cutting maintenance can lead to more expensive reconstruction or replacement of facilities in the long term. As such, a balanced approach that considers both short-term savings and long-term sustainability is essential for Fort Worth's financial future.
- To address the financial challenges, Fort Worth city staff are considering long-term solutions such as creating a new street maintenance fee, considering changes to city compensation and benefits, as well as utility fees, to offset expenses and ensure public safety.
- In order to keep the city's financial stability, city officials are seeking state and federal grants or bond financing for infrastructure and capital projects, and encouraging economic activities that broaden the tax base, including commercial development and incentivizing business growth.
- The city's robust industrial and business environment within the Dallas-Fort Worth (DFW) metroplex, with substantial industrial construction and the attraction of large tenants like Amazon and McMaster-Carr, plays a crucial role in the city's finance, contributing positively to sales tax revenues and supporting economic vitality essential for municipal budgeting.
