\u201cIt\u2019s not unusual for city governments, at first blush, to find that projected expenditures exceed anticipated revenues,\u201d said Fernando Costa, a former Fort Worth assistant city manager who worked for the city 26 years<\/a>.\u00a0<\/p>\n The state requires cities to adopt a balanced budget.\u00a0<\/p>\n \u201cIt\u2019s a challenging exercise, but it happens commonly,\u201d Costa said. \u201cSome years are harder than others and, for a variety of reasons, Fort Worth faces a challenging budget year this year.\u201d<\/p>\n The city manager is slated to present the proposed budget to council Aug. 12, followed by work sessions to address their questions. Community engagement events will take place in each council district during August and early September before a final council vote Sept. 16.<\/p>\n Fort Worth faces increasing expenditures, decreasing revenue<\/p>\n This year\u2019s revenue cuts primarily stem from the Tarrant Appraisal District\u2019s 2024 approval of a reappraisal plan that froze residential property values<\/a> for 2025. Property tax collections account for the majority of the general fund, the city\u2019s primary operating budget.\u00a0<\/p>\n In May, preliminary estimates projected that Fort Worth saw an 8.6% growth in property values over the last year. This growth is lower than in prior years, which saw property values grow by about 12%, said Brady Kirk, assistant director of the FWLab, in a May 13 work session presentation.<\/p>\n State law allows the city to capture only 3.5% of the growth<\/a> in existing values. Fort Worth in May forecasted $622 million in property tax revenue over fiscal year 2026.<\/p>\n \u201cThose percentages can look huge, but the actual income that actually comes to the city\u201d isn\u2019t, City Manager Jay Chapa said at the meeting. He noted 3.5% \u201cdoesn\u2019t even keep up with inflation.\u201d\u00a0<\/p>\n Fort Worth received final property values July 25, but this information cannot be shared publicly until the Aug. 12 meeting, said city spokesperson Preethi Thomas.<\/p>\n How Fort Worth navigates cutting costs<\/p>\n Budget planning is a year-round effort, said city spokesperson Valerie Colapret in an email. Starting in April and through the summer, the city manager briefs council members about the budget so they know what\u2019s shaping the spending plan.<\/p>\n Budget planners asked all departments to cut at least 1% from their respective budgets. Combined reductions across 22 departments would generate nearly $7.6 million in savings, according to city estimates from April<\/a>.<\/p>\n The city manager asked most departments to submit proposals for another 3% in potential cuts, assigning police and fire departments smaller target reductions.<\/p>\n The city\u2019s \u201cpriority-based\u201d budgeting practice advises departments to financially prioritize programs that support health and safety, comply with legal mandates, ensure continuation of services and align with the City Council\u2019s strategic priorities, Colapret said.<\/p>\n Costa, the former city manager, said it\u2019s best to avoid blanket cutting every department\u2019s budget.\u00a0<\/p>\n \u201cMost folks would agree that not every city function is equally important,\u201d he said, listing public safety departments as priorities. \u201cWe should think carefully about how we make cuts, rather than doing so in an arbitrary manner.\u201d<\/p>\n Targeted cost-cutting like Fort Worth\u2019s is standard practice in city planning, said Jiseul Kim, an assistant professor of public affairs and planning at the University of Texas at Arlington.<\/p>\n Eliminating employees or reducing their raises and benefits suggest easy targets, Kim said. However, those have long-term ramifications for employee retention and morale.<\/p>\n Salary and benefits represented 35.6% of the city\u2019s adopted fiscal year 2025 budget. On June 2, Chapa directed departments<\/a> to limit discretionary spending and placed a hiring pause. Vital public safety positions are exempt, as are other \u201chard-to-fill\u201d positions and roles the city deems as urgent, Thomas said.<\/p>\n Another cost-cutting approach is to defer maintenance and capital spending, Kim said, effectively kicking the can of preventive infrastructure care down an ever-deteriorating road.<\/p>\n While this temporarily balances budgets, it can have long-term consequences such as creating the need to fund deferred projects through bond packages.\u00a0<\/p>\n Costa shared Kim\u2019s sentiment, calling it \u201cpenny-wise and pound-foolish\u201d to cut maintenance.<\/p>\n \u201cBefore long, (maintenance) becomes a big problem, and it becomes much more expensive to reconstruct or replace the facilities than it would have been to have maintained them,\u201d he said.<\/p>\n City looks to create new revenue sources<\/p>\n Cities will offset expenses with new revenue streams, Kim said. This could include selling unused assets, creating new fees or raising the property tax rate.\u00a0<\/p>\n In 2024, council members unanimously approved a flat tax rate<\/a> after then-City Manager David Cooke proposed raising it for the first time since 1995. To keep a balanced budget, the city cut funding to the city\u2019s popular Neighborhood Improvement Program<\/a>, eliminated several vacant staff positions, reduced funding for vehicle and equipment replacements and increased salary savings.\u00a0<\/p>\n This year, Fort Worth discussed creating a new street maintenance fee<\/a>, as well as what changes to city compensation and benefits and utility fees, Colapret said.<\/p>\n City anticipates budget balancing to continue getting harder in future years<\/p>\n Officials are braced for budget balancing to become harder in future years due to recently passed legislation that will significantly increase business personal property exemptions<\/a> if approved by voters in November<\/a>. At the May meeting, Kirk estimated it would lead to an $8 million revenue loss in fiscal year 2027.\u00a0<\/p>\n This creates a projected $36.4 million deficit in the fiscal year 2027 budget when combined with recently passed state restrictions on how cities can regulate the food service industry<\/a>.\u00a0<\/p>\n Costa said budget balancing, while more challenging in some years than others, has the positive effect of forcing city leaders to make hard choices among competing priorities and force leaders to think creatively about how to deliver services more efficiently.\u00a0<\/p>\n \u201cIt\u2019s not necessarily a reason to despair,\u201d Costa said. \u201cIt\u2019s a crisis that often presents opportunities for innovation and improvement.\u201d<\/p>\n Drew Shaw is a government accountability reporter for the Fort Worth Report. Contact him at drew.shaw@fortworthreport.org<\/a> or @shawlings601<\/a>.\u00a0<\/p>\n At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here<\/a>.<\/p>\n \n\tRelated\n<\/p>\n Fort Worth Report is certified by the Journalism Trust Initiative<\/a> for adhering to standards for ethical journalism.<\/p>\n Republish This Story<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/IMG_5149.jpg\")
Former assistant city manager Fernando Costa, left, speaks with an event attendee before the State of the City address Oct. 24, 2024, at Dickies Arena. (Cecilia Lenzen | Fort Worth Report)<\/p>\n
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