Fort Worth City Council to vote on property tax exemption for child care facilities | #citycouncil


At a recent Fort Worth City Council meeting, Mayor Mattie Parker told her colleagues that child care facilities across Fort Worth are struggling to keep their lights on and doors open.

“Unfortunately, a lot of these facilities don’t have a bottom line,” Parker said.

On May 14, City Council members will decide whether to allow child care facilities to benefit from a property tax exemption. The exemption could ease the financial burden of struggling facilities and, in turn, make child care more affordable for Fort Worth families, city officials said.

“The business model is incredibly broken,” Parker said.

The City Council vote follows the passage of Senate Bill 1145 and the subsequent statewide approval in November of Texas Proposition 2, which provides cities and counties in Texas the option to offer these exemptions. The act took effect Jan. 1. 

Child Care Associates, a nonprofit organization and child development program that works with Fort Worth child care facilities, has lauded the potential passage of the exemption. The act allows for a property tax exemption of at least 50%, but up to 100%, of the appraised value of properties operating as child care facilities.

For a property to qualify, it must be used exclusively to provide developmental and educational services. 

For example, if a property owner leases to a child care provider, the exemption would apply only to the portion of the property used for child care — dual exemptions with residential homesteads are not permitted.

Also, the qualifying child care facilities must participate in the Texas Rising Star program, the state’s quality rating and improvement system for child care facilities, and ensure that at least 20% of their enrolled children receive subsidized care.

“The ones that won’t qualify are the for-profit providers,” Parker said. “Those that are going to qualify are … going to pass (savings) through a lesser electric bill burden or being able to pay their teachers $1 or $2 more an hour.”

Out of the estimated 338 child care locations in Fort Worth, 54, or nearly 16%, meet the requirements and do not already possess other forms of exemptions, according to city officials.

If the City Council votes to exempt 100% of property tax for those 54 providers, estimates suggest a potential revenue loss of nearly $200,000 to Fort Worth’s general fund tax revenue. 

Based on language provided in Senate Bill 1145, Texas cities and counties can’t exempt any less than 50% of qualifying child care locations’ property taxes. If the City Council votes to exempt facilities’ property tax at that level, the city would lose $98,304 in tax revenue. 

Savings for facilities, on the other hand, would be in the thousands of dollars. 

At a 50% exemption, facilities could see a $1,820 decrease in their yearly tax bill, on average. If fully exempt, facilities could see an average relief of up to $3,641, according to city estimates. 

But, council member Macy Hill asked, if property owners apply for the exemption, how does Fort Worth make sure they aren’t taking advantage of their tenant? Landlords of child care providers must be held accountable, Hill said. 

To apply for the exemption, a property owner must submit an application to the Tarrant Appraisal District, along with an affidavit demonstrating that savings are being passed to a tenant through lower rent or utility bills, said Christianne Simmons, the city’s chief transformation officer. 

Hill said adding a mechanism at the city level, and not just relying on TAD, could further bolster the city’s intent to make sure savings are felt by child care providers and not landlords.

Simmons said she will remedy possible solutions before the board’s scheduled vote on Tuesday.

Back in November 2023, when Proposition 2 was approved by 64.8% of Texas voters, Parker told city staff to begin the process of bringing the exemption before the City Council.

“This is not the type of industry you get in to make a lot of money, unfortunately,” Parker said. 

In recent months, counties and cities in Dallas, Houston, San Antonio and Austin have adopted the new property tax exemption. On Tuesday, Fort Worth could be next.

Matthew Sgroi is an education reporter for the Fort Worth Report. Contact him at matthew.sgroi@fortworthreport.org or @MatthewSgroi1 on X. 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.

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