Here are 5 things to know about Dallas’ upcoming $4.97 billion budget

Dallas is considering a nearly $5 billion budget that highlights record spending to improve city services while at the same time raising fees and reorganizing departments in order to sustain them.
The City Council is scheduled to vote on a final version of the latest annual spending plan on Sept. 18. The budget covers city spending from Oct. 1 to Sept. 30.
Here are five things to know about Dallas’ proposed budget for the next fiscal year:
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At $4.97 billion, Dallas’ upcoming budget would be the largest in city history. This citywide spending plan is a $350 million increase from the one approved last fall.
The budget is largely supported by more than $1 billion in property tax revenue and more than $463 million in sales tax money. Those dollars make up the bulk of the general fund, which pays for the majority of city services such as police and fire response, libraries, parks and road maintenance.
The general fund for the next fiscal year is budgeted to be $1.9 billion — $65 million more than the current fiscal year.
This year’s budget is also augmented by $250 million from a $1.25 billion bond program that voters approved in May to pay for several hundred road, park and city infrastructure projects over five years.
The proposed budget includes what would be the biggest property tax rate reduction in at least 40 years. The rate would drop to 70.47 cents per $100 valuation, a 3.10-cent decrease.
If this rate is approved by the City Council, it would be the ninth year in a row that Dallas’ property tax rate has been lowered. The next comparable reduction since 1984 is when the rate was decreased from 77.33 cents per $100 valuation to 74.58 cents in 2022.
The city would forgo close to $66 million in revenue to allow the latest tax rate reduction. The City Council in June also approved raising the homestead exemption for residents who are at least 65 years old or have disabilities to $153,400 from $139,400.
The rate reduction and exemption increase are meant to help make living in Dallas more affordable for residents. Dallas’ property tax rate is the highest of Texas’ five biggest cities and even with the latest reduction would still be higher than the rates in Houston, San Antonio, Austin and Fort Worth.
Dallas’ budget proposal comes after city officials identified a $38 million funding gap in May and asked all city departments to find 6% in budget reductions.
An influx of money from the city’s tax base growth, property tax and sales tax revenue, department reorganizations and projected money from new fees are expected to help cover the shortfall, city officials say.
This comes as the city also plans to increase its contribution to its two employee pensions to help close their roughly $4 billion deficit. The city is mandated to find a way to close the gaps in the Police and Fire Pension System and the Employees’ Retirement Fund by 2055.
Last year, city officials estimated it would take 51 years for the employee retirement fund to be fully funded and 82 years for the police and fire pension. In the latest budget, the city plans to increase its contribution to the police and fire pension to more than $202 million from around $185 million. It also plans a more than $14 million increase for the employee retirement fund.
Despite a record cut in property tax rates, it’s likely many residents will see higher bills due to rising property appraisals as well as increased and new fees for some city services.
According to city estimates, the average ratepayer would pay almost $75 more a year in water, stormwater and sanitation services as well as an extra $36 a year in a new environmental cleanup fee to fund things like storm debris clearing, homeless encampment cleanups, dead animal removals and litter pickups in public right-of-ways. The new fee is expected to bring in $10.5 million a year and would be split between the transportation and public works department (about $6 million), sanitation department ($3.5 million) and homeless solutions office (about $1 million).
Projections from city officials show the average Dallas homeowner without a senior homestead exemption could see a $181 increase to their city property tax bill next year and an estimated $126 rise with the exemption because of rising property appraisals. The city defines the average homeowner as someone with a residence that has a median market value of $381,545.
Other fees are also budgeted to increase. For example, application fees to establish a residential parking only zone is budgeted to go to $350 from $50, and the cost of ceremonial street signs is budgeted to increase to $130 rise from $30.
The city is planning to combine several departments, a decision officials say would streamline services for residents and others doing business with the city. Combining offices that regulate planning and zoning as well as departments that oversee transportation and public works are among the moves being made that are projected to save the city upwards of $3 million.
The budget also recommends eliminating 541 city worker positions, around 75% of them in the police and fire departments. City officials say at least 280 of the cut positions are vacant and have no funding attached to them and that the 541 spots were considered “excess positions” not vital to city operations. Some of the other decreased positions were recommended in the city’s code compliance and library departments.
Those proposed moves come as the city plans to hire 250 more police officers, hire 62 more firefighters and increase starting pay for both to $75,397. Under the proposed budget plan, the Dallas Police Department’s budget would jump to $719 million from nearly $657 million, and the Dallas Fire-Rescue budget would increase to almost $430 million from $413 million. Meanwhile, the budget proposes decreasing general fund dollars for all the other departments by around $13 million combined.
Proposed department budget decreases include the Office of Homeless Solutions getting $3 million less than its current $17.8 million budget, the housing department getting $2.5 million less than it’s current $6.9 million budget and the Office of Equity and Inclusion getting close to $1 million less than its current $3.8 million. There were also initially plans to close the Skillman Southwestern Library in northeast Dallas, but the City Council on Wednesday signaled support for shifting city funds to pay for keeping it open after community opposition to the closure plans.