Fort Worth budget projections show city expenses outpacing estimated revenue until at least 2033, staff told City Council members Tuesday.\u00a0<\/p>\n
If the projections aren\u2019t accounted for, next year\u2019s budget could face a shortfall of nearly $50 million, said Brady Kirk, assistant director of the FWLab, which leads the city\u2019s budget planning. He forecasted costs surpassing revenue by up to $49 million until 2033.\u00a0<\/p>\n
City Manager Jay Chapa said the shortfalls will be addressed as staff and council members kick off the public-facing portion of preparing next year\u2019s budget with a series of workshops in May. Under state law, municipal governments must adopt a balanced budget, meaning estimated costs cannot exceed estimated revenue.\u00a0<\/p>\n
The presentation Tuesday echoed last April\u2019s budget discussions, when Chapa instructed department heads to reduce their funding requests<\/a> to offset a nearly $14 million budget shortfall. Council member Macy Hill remembered the proactive planning, urging staff to think now of how to address and reduce financial needs.\u00a0<\/p>\n \u201cI\u2019d ask \u2014 way in advance, too \u2014 can y\u2019all start looking at cost-cutting measures as we\u2019re having these budget conversations so we\u2019re not last-minute scrambling around, trying to figure out where we can make the budget balanced?\u201d Hill asked staff during the meeting.\u00a0<\/p>\n Property tax revenue makes up the majority of the $1.1 billion general fund Fort Worth uses to pay for everyday resident services such as public safety, parks and libraries. That fund was over-budget by as much as $9.7 million<\/a> as of January, staff previously told council members.\u00a0<\/p>\n Fort Worth\u2019s projected tax revenue is growing at a slower rate than its projected costs because of a number of local, state and national factors, Kirk told council members.\u00a0<\/p>\n In 2024, the Tarrant Appraisal District\u2019s board of directors limited residential appraisals to once every two years<\/a> \u2014 a change from the previously annual assessments that determine homeowners\u2019 tax bills.<\/p>\n Because of that change, Kirk explained, Fort Worth\u2019s annual tax revenue grows at a slower and less predictable rate \u2014 and only during odd-number years.\u00a0<\/p>\n Meanwhile, inflation and interest rates are rising, Kirk said.\u00a0<\/p>\n He anticipates that most city operating expenses will increase by 3% to 4% in the next fiscal year, while specific areas such as emergency medical services could face even higher inflation.\u00a0<\/p>\n Federal stimulus payments during the COVID-19 payment helped offset inflation, stopping the economy from slowing down but resulting in record-low interest rates, Kirk said.\u00a0<\/p>\n Today\u2019s high interest rates and lowered government spending \u2014 which Kirk attributed in part to recent federal government shutdowns \u2014 led to the current budget uncertainty, he said.\u00a0<\/p>\n Next year\u2019s projected shortfall of about $50 million is based on the city\u2019s current staffing and services levels without accounting for potential new positions or programs, Kirk said. Last month, Chapa implemented a hiring freeze<\/a> for most city departments to address the budget shortfall.\u00a0<\/p>\n The city\u2019s $845 million bond package<\/a> could lead to increased staff and utility requirements if voters approve the list of infrastructure projects in May, Kirk said.<\/p>\n \u201cThose would be things that would probably not have much impact on the revenue side but would increase expenses in future years,\u201d he said of the bond projects.\u00a0<\/p>\n City officials were cautiously anticipating a revenue bump this summer as North Texas welcomes the FIFA World Cup, although Kirk said such revenue wouldn\u2019t impact long-term budget planning.\u00a0<\/p>\n Last week, city staff estimated paying about $2 million<\/a> for additional city services and staffing to accommodate increased demand on Fort Worth\u2019s transportation and emergency response departments during the World Cup games. The projection came as FIFA officials slashed attendance estimates<\/a>.\u00a0<\/p>\n \u201cThere will be less of an impact than a lot of us thought was going to happen, but we should have some kind of bump,\u201d Chapa told council members.\u00a0<\/p>\n Council members meet for five scheduled workshops<\/a> in May and June before their summer recess in July. Chapa will present a recommended budget in August, which council members adopt by the end of September. Fort Worth\u2019s fiscal year 2027 starts Oct. 1.\u00a0<\/p>\n Cecilia Lenzen is a government accountability reporter for the Fort Worth Report. Contact her at cecilia.lenzen@fortworthreport.org<\/a>.\u00a0<\/p>\n