Page 29 - Bedford-FY24-25 Budget

Truth in Taxation

The ad valorem tax is a tax assessed on real property in order to provide a revenue stream for government
operations. The tax rate to fund the FY 2024-2025 budget is $0.495726 per $100 assessed valuation, which was
presented to the City Council for approval during the budget process.

The tax rate is used to generate revenue to provide for operations. The two main functions supported by the ad
valorem tax are General Fund operations and Debt Service payments. The tax rate has two different sub-rates.
The maintenance and operations, or M&O, rate is used by the General Fund to pay for General Fund
expenses.
The interest and sinking, or I&S, rate is used by the Debt Service Fund to pay for the annual debt
obligations for the City.

To determine the tax rates for FY 2024-2025, the Tax Assessor for Tarrant County utilizes information from
FY2023-2024 and from the estimated new property values developed during the current scal year.

The following are the rates established by the Tax Assessor:

No New Revenue Tax Rate $0.484255
No New Revenue M&O Rate $0.346388
Voter Approval Tax Rate $0.496317
Debt Rate $0.137867

Unadjusted Voter Approval Rate $0.571662
Sales Tax Adjustment Rate $0.075883
Voter Approval Rate, Adjusted for
$0.495779
Sales Tax

Senate Bill 2, also known as the Texas Property Tax Reform and Transparency Act of 2019, was passed by the
Texas Legislature in 2019. At its most fundamental level, S.B. 2 reforms the system of property taxation in three
primary ways: (1) lowering the tax rate a taxing unit can adopt without voter approval and requiring a
mandatory election to go above the lowered rate; (2) making numerous changes to the procedure by which a
city adopts a tax rate; and (3) making several changes to the property tax appraisal process (Texas Municipal
League). The bill took effect January 1, 2020.

Previously, any rate adopted that exceeded the 8 percent rollback rate triggered the ability of citizens to
petition to hold an election to “roll back” the tax rate to the rollback rate. Generally speaking, S.B. 2 requires a
city to hold an automatic election (i.e., the bill eliminates the petition requirement) on the November uniform
election date if it adopts a rate exceeding the 3.5 percent voter-approval rate. See TEX. TAX CODE § 26.07.

City of Bedford, TX | Adopted Budget FY 2024-2025 Page 29