Baytown's Credit Report Card: What AA and Aa2 Mean for the City

Baytown's general-obligation debt is rated AA by S&P and Aa2 by Moody's. Both grades sit in the second-highest tier of each agency's scale. In plain terms, lenders see the city as a safe bet to repay what it borrows.

That matters at the kitchen table because a city borrows to build streets, drainage and fire stations, and a stronger grade generally means a lower interest bill on that debt. The grades are a signal to lenders, not a bill or a rate you pay, and they do not set any particular tax or utility amount for your household.

Here are the grades, next to the tax rate, the city's savings and the bonds voters considered.

The short version

• S&P rates Baytown's underlying general-obligation debt AA, and Moody's rates it Aa2 (FY2025 financial report). The top grades are AAA at S&P and Aaa at Moody's.
• Of the city's $0.70042 per $100 tax rate in FY2025, $0.263530 paid debt service.
• The FY2027 rate is $0.69803 per $100, and the debt part is $0.25991.
• The general fund held $36,118,906 in unassigned savings at the end of FY2025, which is 27% of expenditures.
• Voters passed two of six bond propositions in November 2025, worth $34,700,000 in total.

What the ratings say

The FY2025 Annual Comprehensive Financial Report lists the two grades: AA at S&P and Aa2 at Moody's. Think of them as report cards on whether the city is likely to repay what it borrows. The city's financial report lists no Fitch rating, so none is given here.

Ratings are opinions from private agencies. They are not a grade from the city, and they can change. The year matters: these are the grades in the report for the year ended September 30, 2025. The agencies' own rating reports, and the city's bond filings on the Municipal Securities Rulemaking Board's EMMA site, show the latest action.

The debt part of your tax rate

A city property tax rate has two parts. One pays to run the city, and the other pays back borrowed money. The FY2025 schedule shows $0.436890 per $100 for the general fund and $0.263530 for debt service. Together they make the $0.70042 rate for FY2025, which was tax year 2024.

For FY2027, the council adopted $0.69803 per $100 on September 10, 2026. The debt part is $0.25991, which leaves $0.43812 for operations. The city notice lists a no-new-revenue rate of $0.68517 and a voter-approval rate of $0.74695. The adopted rate is the same dollar rate as FY2026. About 37 cents of every dollar of that rate goes to paying back borrowed money, so what Baytown pays to borrow is a real line in your tax bill.

The savings account

Reserves are what readers of a city's finances watch first. At the end of FY2025, the general fund's unassigned balance was $36,118,906, or 27% of expenditures. For FY2027 the adopted budget projects an ending general-fund balance of $36,417,679, which equals 92 days of operating expenditures.

The FY2027 plan shows general-fund revenue of $149,366,499 and expenditures of $154,005,001, so expenditures run $4,638,502 above revenue. A reserve is what covers a gap like that, which is one reason lenders look at it. The all-funds budget is $424,324,581, which the budget book calls a 6.7% increase from FY2026.

Where the money comes from

The city collects sales tax too. In FY2025, all sales taxes brought in $35,133,989, up from $33,675,244 in FY2024. Three local pieces are one-eighth of one percent for the Crime Control and Prevention District, one-eighth of one percent for the Fire Control Prevention and EMS District, and one-half of one percent for the Municipal Development District.

The FY2025 report also lists the largest property taxpayers. CenterPoint Energy Inc. had $120,971,182 in taxable assessed value, and Raven Butene-1 LLC had $84,726,890. Exxon Mobil Corp had $70,860,659. A tax base anchored by plants and utilities is part of the picture for a refinery-and-chemical town.

Bonds, voters and the plan ahead

In the November 2025 election, voters approved Proposition B for mobility, with $30,450,000 for streets, sidewalks and traffic, and Proposition D, with $4,250,000 for Fire Station 4 design and land. That adds up to $34,700,000. Four propositions did not pass: A at $69,864,400, C at $14,025,500, E at $13,000,000 and F at $19,757,000.

The FY2027 capital plan includes $111,275,087 in new allocations. The five-year plan for FY2027 to 2031 totals $982,107,134. Plans are not promises of borrowing, but they show the size of the needs the city is weighing.

Other grades the city holds

Credit is not the only report card. Baytown has a Class 1 Public Protection Classification for fire protection, earned in 2018. In the federal flood-insurance program it holds Class 5, with a 25% discount for policies in flood hazard areas and 10% outside them.

What this means for you

A letter grade is one report card among several the city holds. Check the rating agency, the debt type and the fiscal year of any debt figure beside a rating, and do not turn a municipal rating directly into a household tax or utility amount. When the next bond election comes, look at the amount, the purpose and the share of the tax rate that already goes to debt. Ask what a project costs to run after it is built.

Sources

• City of Baytown: Annual Comprehensive Financial Report, fiscal year ended September 30, 2025 (city Finance pages, https://www.baytown.org)
• City of Baytown: FY2027 Adopted Budget (https://baytown.org/Archive.aspx?ADID=1317)
• City of Baytown: Notice about 2026 Tax Rates (https://www.baytown.org/439/Notice-about-2026-Tax-Rates)
• City of Baytown: 2025 Bond Projects (https://www.baytown.org/1447/2025-Bond-Projects)
• City of Baytown: Insurance Services Office (ISO) (https://www.baytown.org/1491/Insurance-Services-Office-ISO)
• FEMA: Community Information System, Texas (https://www.fema.gov/cis/TX.csv)
• City of Baytown: news item on the FY2025 tax rate (https://baytown.org/Blog.aspx?IID=292)
• Municipal Securities Rulemaking Board: EMMA (https://emma.msrb.org)