Dallas Chief Financial Officer: There’s a $38 Million Shortfall in 2025 Proposed Budget
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And so it begins. The Dallas City Council got a first look at the process of preparing the 2024-25 and 2025-26 biennial budget on Wednesday and was advised of a looming $38 million shortfall.
Interim City Manager Kimberly Bizor Tolbert introduced the May 15 budget briefing.
“As a result of revenue limits and increased expense pressures, we must take a different approach to this year’s budget, and we are prepared to do that,” she said. “We must reconsider our service delivery models, our organizational structure, and our service priorities to ensure we are operating more efficiently and responsibly.”
Staff will present a recommended budget on Aug. 13.
The City Council adopted a $4.62 billion budget last year after much debate about the property tax rate and how to address a massive deficit in the Police and Fire Pension Fund. Ultimately the council lowered the tax rate for the eighth consecutive year, from 74.58 cents to 73.57 cents per $100 assessed valuation.
View Wednesday’s 79-slide presentation here and the City Council budget discussion here.
Dallas City Council Reviews Budget Process
A $1.25 billion bond was approved on May 4, meaning numerous projects in 10 categories will be funded through bonds rather than pulled from the general fund budget.
Chief Financial Officer Jack Ireland said the city is facing multimillion-dollar shortfalls not only for the upcoming fiscal year but through 2028.
“There are probably things we have not built in yet,” Ireland said, noting that property appraisal protests were due May 15 and the city is unsure how much it will collect in tax revenue. “We are continuing over the next 11 weeks to work on our different revenue sources, on all of the expenses, and we will have to make other adjustments. We are seeing employee health benefits trending a little higher than expected, so we may have to make an adjustment related to that.”
Ireland said he is meeting with department directors to identify new service delivery models.
“We do plan on repurposing some positions that have been vacant longer than 12 months,” Ireland said. “We want to focus more on the quality of positions, not the quantity of positions. We are looking very closely before we will ask you to approve additional positions.”
Budget town hall meetings will be held in August, and public hearings are scheduled for May 22 and Aug. 28.
“When we come on Aug. 13, there will not be a shortfall,” Ireland told the council. “We will have a recommended balanced budget. We will do that work for you this summer and it will be up to y’all to take that recommendation and move forward.”
Council Feedback on Dallas Budget
Some of the proposed cost savings, such as eliminating “ghost full-time employees,” were proposed by District 12 Councilwoman Cara Mendelsohn more than a year ago.
“For five years I’ve been sitting here saying these things,” Mendelsohn said Wednesday. “I feel a little bit validated that we’re now going to do it, but it sure is frustrating that just because the money was available, we added it into our budget.”
In response to a question from District 9 Councilwoman Paula Blackmon, Ireland said there are some items that have to be prioritized.
“We’re going to fund our pension,” he said. “That’s going to be a sacred cow. Our debt service, the things that we are legally bound to do, we are not going to jeopardize the city on those sorts of things. As far as a department, is a department exempt from the review and analysis? No. we will look at all departments.”
District 1 Councilman Chad West told CandysDirt.com after the meeting that he was pleased to see a proposed budget that “incorporates large contributions to both the employee and uniformed pensions, along with suggestions for a longer-term plan to completely shore it up.”
A plan to elevate the Development Services Department is key in ensuring economic stability, West added.
“Of course, the chief financial officer also indicated the projected budget shortfall once we include meaningful pension contributions and opined early on that the incoming construction development projects may help make up the gap,” West said. “That brings to top of mind just how important it is for our permit office to be the best in the country, or at least incredibly efficient. The permit office is our gateway to construction jobs, new housing, and the tax revenue we need to close this budget gap while sustaining services.”
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Maybe the previous city manager(Broadnax) shouldn’t have wasted $5M on HR&A consulting, that told council nothing that staff hadn’t already been telling them for years. How many other “consultations” has he wasted money on over the years?
Why did council spend millions on a building (Stemmons) that was basically on it’s way to being condemned prior to purchase, and then try to pass it off to citizens as a “new and improved” permitting office? Really? A permitting office that many citizens can’t access due to location? Great job meeting those” equity goals” they are so proud of touting.
I honestly can’t roll my eyes hard enough at this “shortfall”, that anyone could have seen coming, if they bothered to pay attention –
Dear Joe:
1000%
Next it will be… we have to raise the tax rate.
The shortfall in the new budget will be added to because of the building Majed Al-Ghafry bought for building inspection. It is going to cost 10 S of millions of dollars to put us in a building that should have been torn down!! Andrew says we were just the customer but he seems to love to spend money and abuse our budget dollars!! He makes it so hard to earn a living in Development services! Don’t forget he needs to be investigated about our shortfalls and why we are getting 1.8 million dollars every month to support his habits!!
Dallas and most large US cities are clones of our federal system. It’s all crooked and wasteful. You could give the City $5trillion dollars and they would still want more money more bond raises etc. They spend money on nonsense junk instead of useful programs. I’m watching the city add ADA curbs in my neighborhood. Imagine what that costs and it’s a complete waste of tax payer resources. That just a minor example.