7 things to know about Dallas’ proposed $5.2B budget

After months of what Dallas officials indicated would be a “painful summer” to balance its budget, City Manager Kimberly Bizor Tolbert unveiled a $5.2 billion draft Friday with a modest decrease in the property tax rate, over $60 million more in investments in the police and fire departments and renewed focus on modernizing how it conducts its business.

Across all departments, the proposal eliminates 100 positions currently filled by active employees and bumps first responder staffing and salaries.

City officials said they relied heavily on the latest iteration of the annual community survey, where residents highlighted transportation, public safety and social services as their top priorities.

Political Points

The financial landscape has been challenging for most local governments. Sales tax collections have simmered and are not growing at the rate officials were expecting, and property tax contests have reduced the city’s revenue. Dallas had a $36.5 million funding gap in June, just 2% of the $1.96 billion the city expected to collect.

Meanwhile, costs continue to increase across the country.

“So with all this in mind, we really needed to come up with a different strategy,” Tolbert said.

This year, the city began funding its program and departments through priority-based budgeting instead of incrementally funding separate departments. “Our commitment is to continue to listen, continue to be fiscally prudent, making sure that we’re addressing our core services across the city, and making sure that as we prepare for upcoming budgets, we will continue to fine-tune our priority-based budgeting approach.”

Budget growth

Tolbert’s proposal is partially boosted by a larger general fund, which pays for the bulk of city services and is nearly $62 million more than the current budget. The general fund is buoyed by a $47 million increase in property tax revenue and an additional $10 million from sales taxes.

Tolbert’s budget draft also features a property tax rate reduction for the 10th year in a row, plans to hire 350 new cops starting this fall and increase starting pay, and merge several city departments.

Tolbert’s proposed budget also calls for spending $162 million in street improvements, $38 million more than initially budgeted last year, increasing the minimum wage for city employees from $19.25 an hour to $21.50, increased residential sanitation rate fees, closing the Skillman Southwestern Branch Library and increasing the use of artificial intelligence in city operations like code enforcement.

Tax rate

The proposal cuts the tax rate for the tenth consecutive year.

Unlike 2024, when the city reduced the rate by three cents, this year the decline is far more modest. The tax rate decreases from 70.47 cents per $100 to 69.97 cents per $100. Dallas derives most of its revenue from property taxes, and the city will forgo $11 million in revenue with the new tax rate.

In June, the City Council increased the homestead exemption for residents 65 and older or who had disabilities from $153,400 to $175,000, marking the seventh time the city increased its exemption level since 2017.

What does that mean for the average homeowner?

The median home value in the upcoming budget year stands at $382,010. With the new tax rate and a homestead exemption, the average homeowner’s tax bill would be $12.66 less than last year. Still, each resident’s tax burden will be dependent on whether their property values have risen or not and by how much.

Public safety increases

The Dallas police and fire departments continue to be the highest-funded city agencies. About 61% of the $1.96 billion general fund is going to police and fire services, a similar percentage as last year.

This budget is the first one developed since Dallas voters last fall approved a city charter change mandating increased annual police-related spending to shore up the pension, push starting pay and benefits to be among the top five in Dallas, Collin, Denton, Rockwall and Tarrant counties, and have a police force of at least 4,000 cops. The city has more than 3,200 police officers and aims to hit 4,000 in 2029.

The draft Dallas spending plan allots the police department $758 million, a 5% increase from last year’s $719 million. The fire department proposal is $453 million, also up 5% from last year.

Along with plans to hire more officers, Tolbert said the city intends to increase the starting pay for cops and firefighters to $81,232 a year, up from $75,397.

If the new starting annual pay were to be in place as of Friday, it would still leave the Dallas Police Department behind McKinney ($81,629), Richardson ($82,565), Lewisville ($83,682), Allen ($85,465) and Frisco ($86,600), and Plano ($86,922).

Dallas Chief Financial Officer Jack Ireland told The News on Friday evening that, based on their survey of other departments done in March, budget leaders believe the city’s new starting base pay for police officers will be third in the region when combined with “non-pension benefits, excluding sign-on bonuses,” as required in the charter change. City officials didn’t immediately provide more details from their survey Friday.

Tolbert noted that none of Dallas’ neighboring cities are having to hire officers at a comparable rate and size. Dallas has a population of 1.3 million.

“I’m talking about hiring 350 officers in 2026; I’m talking about hiring 400 officers in 2027. There’s not another municipality in that five-county region hiring at that level,” Tolbert said Friday morning. “We know that there will always be cities chasing that first position because all they’ve got to do is add $1 more here, $5 more here, but the volume and the overall impact to their budget is not as great as us.”

Artificial intelligence and improved IT systems

City officials plan to install 100 cameras powered by artificial intelligence on sanitation trucks early next year. The city’s code compliance and sanitation departments plan to use the cameras to locate and respond to code violations, such as weeds, graffiti and illegal dumping. “(Sanitation trucks) are the vehicles that are out every single day of the week,” Tolbert said.

This puts Dallas in a unique position. It will be the largest municipality in Texas to deploy this type of technology. ”I see this really as an overall improvement in how we’re not waiting for our residents to call us and send complaints in through 311,” she said, adding she had met with several city managers from around a few weeks ago who mentioned they, too, would like to see how the technology plays out in Dallas.

Moreover, AI will also be used to automate 311 service requests and to improve how Dallas solicits vendors.

Officials also will use Hazel AI to automate procurement services. It will be used to help develop the scope of work that will be shared with contractors applying for a job.

Department mergers continue

The biggest consolidation in this year’s budget involves combining the departments of the Office of Community Care and Empowerment, Equity and Inclusion, Homelessness Solutions and Housing and Community Development. They will be branded as the Office of Housing and Community Empowerment.

The merger will save around $6.2 million.

Tolbert said the consolidation will not result in reduced services; however, 38 city jobs would be eliminated, and another 30 vacant positions would be transferred to other areas.

As part of the reorganization, the Housing Department would no longer oversee the Homeowner Assistance and Minor Home Repair programs. These programs would be privatized.

The Department of Economic Development will serve as contract management for developers.

Building on the city’s efforts to find long-term solutions to homelessness, Tolbert proposes using $10 million from American Rescue Plan Act funds to help transition individuals from shelters to stable housing.

The program moves homeless people ready to transition into permanent housing out of local shelters, freeing up more beds in places such as the Austin Street Center and the Bridge Homeless Recovery Center.

“We’re trying to use this to help the ecosystem as a whole,” Tolbert said. “Because we often hear that we have so many individuals that at night, even if they wanted to go into some shelter, if those beds are still filled, then there’s no place for them to go.”

Tolbert said the city is looking to work with Dallas County on this program.

DEI no more?

Dallas officials over the last several years have emphasized that racial equity was a key part of Dallas budget planning, but that isn’t the case with this latest budget draft.

Tolbert said she believes equity “can’t be about an office” and has to be inherently embedded into the work the city’s municipal government does.

“We have an opportunity to do the work in a way that we are still addressing disparities,” Tolbert said Friday morning. “We’re looking at barriers, and we’re continuing to find ways to create pathways for people to thrive across our city, no matter where they live, no matter what zip code they’re in, we know that that work and that body of work has to continue.”

Tolbert ordered Dallas officials in late June to suspend all municipal government programs and policies that promote diversity, equity and inclusion initiatives in an effort to comply with anti-DEI directives recently announced by President Donald Trump. The move is meant to help the city retain millions in federal grant funding.

Last year, the word “equity” appeared more than five dozen times over the first 59 pages of last year’s budget, which largely encompasses the plan’s executive summary. That includes a stated goal for Dallas to strive to be “the safest large city in the United States by serving and protecting our diverse community with equity, integrity, and respect.”

This year’s 52-page executive summary released by the city on Friday has “equity” written five times, solely in reference to the office of equity and inclusion, which is no longer set to be a standalone department, Tolbert said Friday.

Infrastructure

Year after year, community surveys conducted by the city have placed street repair on the top of their priority list. Tolbert said the city plans to improve 750 lane miles in the upcoming budget year, using $162 million from the general fund, 2024 bond funds and ARPA money for the street maintenance program.

The budget proposes finishing 10 missing sidewalk sections and about 11,000 curb ramps from the previous year by allocating the remaining DART excess sales tax funds and $300,000 from the general fund.

Officials also proposed allocating $1 million in capital funds to refurbish unimproved alleys.

In an effort to progress the Vision Zero Action Plan, which seeks to reduce traffic-related deaths and injuries, the city wants to leverage $1.5 million to secure an additional $9 million in federal funding. This funding will be used to implement improvements identified in corridor studies along several key roadways, including Ferguson Road, Lake June Road and St. Augustine Road.

The city also has plans to kickstart the first of three phases of the recently adopted Bike Plan using $2 million from the general fund and $1.6 million from DART excess sales tax funds. The plan calls for the city to have an additional 17.89 new miles of bike lanes by 2030.

After months of scrutiny of how Dallas manages its properties, including the failed planning and development services building on 7800 Stemmons Freeway, Tolbert proposed adding $2 million to address long-term asset reliability and reduce the need for emergency repairs with the aim of being more proactive about maintaining the city’s more than 500 buildings.

“We really need a real estate master plan to help guide decisions around assets that we should monetize and things that we should be doing when it comes to truly looking at our overall real estate portfolio,” Tolbert said. “The facilities condition assessment, as well as the real estate master plan, are both being included in how we address those in the budget going forward.”

7 things to know about Dallas’ proposed $5.2B budget

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