Page 13 - Haltom City FY 22 Budget

BUDGET COMPONENTS

Each major fund begins with a Budget Summary of revenues and expenditures. This summary provides
an overview of the budget. The summary sheets provide information on the Prior Year Actual, Current
Adopted Budget, Projected Year End Budget, and the Proposed Budget for FY 2021-2022. The ending fund
balance is also included and should be considered a key element in the decision-making process for each
of the larger funds. The total FY 2021-2022 proposed budget revenues are $114,987,590 while the total
expenditures are $110,921,972.

One of the major revenue sources of the budget is property taxes. The FY 2021-2022 proposed budget
was prepared using the tax proposed rate of $.64565 per $100 of net taxable value and an estimated Net
taxable value of $2,767,760,865.

The rate for maintenance and operations is $.395769 per $100 of net taxable value and debt service is
$.249882 per $100 of net taxable value. The adopted property tax rate is the lowest the City has seen in
13 (thirteen) years since 2009. The increases in economic growth will continue to grow our property tax
values and allow future decrease in property tax rates.

With the signing of Senate Bill 2 (Texas Property Tax Reform and Transparency Act of 2019) into law, the
bill makes various changes to the appraisal process and how property taxes are set. As a reminder, the
bill lowered the Voter Approved Tax Rate (was termed Rollback Rate) from 8 (eight) percent to 3.5 (three
and a half) percent. The bill went into effect on January 1, 2020 and applies to the 2021-2022 budget year.

The bill changed terminology. The “No-New Revenue Tax Rate” refers to the tax needed to raise the same
amount of maintenance and operations property taxes on existing properties as the previous year. The
“Voter-Approval Tax Rate” is the rate necessary to raise 3.5 percent more maintenance and operations tax
revenue as the previous year before accounting for appraisal fluctuations. If the adopted rate exceeded
the 3.5 percent Voter Approval Rate, the City would be required to hold an automatic election.

Sales tax is another significant revenue source for the city, with over $15 million in collections for FY 2021-
2022. Due to the types of businesses that make up our sales tax base, we were fortunate to have had
little impacts to our sales tax revenues during the Covid pandemic. Sales Tax has continued to increase
this fiscal year by an average of 14% over last year. Although the double-digit increases are over the Covid
related periods last year, our sales tax base has grown at the same time with new businesses contributing
to the increase. The City receives 2% sales tax, and the allocation is 1.375% for General Fund, 0.375% for
Streets, and 0.25% for Crime Control and Prevention District.

The expenses consist of two major components. The first is the base budget. The base budget provides
each department and division with similar funding as the prior fiscal year, less any one-time costs. The
base budget also includes all capital projects, equipment replacements, and non-discretionary items such
as necessary price adjustments and commitments.