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City manager shows seven‑year forecast, warns of near‑term multi‑million dollar shortfall
Summary
City Manager Jay presented a seven‑year general fund outlook showing a potential roughly $68 million cumulative shortfall under current assumptions and highlighted a nearly $6 million estimated revenue impact from a state bill increasing business personal property exemptions.
City Manager Jay presented a macro, seven‑year general fund forecast at the retreat and warned the council of potential revenue headwinds tied to state policy and appraisal timing.
Jay reminded the group that Fort Worth is growing quickly and cited regional projections that the city could reach roughly 1.3 million residents by 2050. He noted the local housing market’s trends: 2023 median home value near $300,000 and an abundance of new single‑family listings above $400,000 in many parts of the city.
On revenue risks, Jay highlighted recent state changes and appraisal timing as key drivers. He said Tarrant Appraisal District did not reappraise residential properties this year, and he singled out House Bill 9 as a state change that reduces business personal property taxation thresholds: “There’s a $6,000,000 reduction in, in our actual, income,” Jay said, describing the anticipated fiscal hit if no mitigation is enacted.
Looking across seven years and assuming current policies and expected operating costs (including pay study and health insurance projections), Jay said staff’s baseline forecast could produce roughly a $68,000,000 negative net position over seven years and a near‑term gap of about $40,000,000 under the model’s assumptions. He emphasized that the projections are macro and that staff will propose balancing options as the budget process proceeds.
Council members asked technical questions about how the shortfall was calculated and about timing for potential inflows, including economic activity tied to FIFA events in the DFW metroplex and the prospect of site selections (TCU among potential local venues) expected in late February or early March. Jay said staff will return with options to manage the forecasted shortfalls and noted ongoing contract negotiations (fire, EMS) that will affect outcomes.
The presentation concluded with council direction for staff to continue scenario development and to bring specific balancing proposals during the formal budget process.
