Dallas adopts fiscal 2027 budget with public safety funding boost

Bloomberg News

The Dallas City Council approved a $5.66 billion all-funds fiscal 2027 budget on Wednesday that once again allocates more money to public safety to comply with a voter-approved proposition. 

The spending plan for the fiscal year that begins Oct. 1 includes a 4.2% increase in the general fund to $2.05 billion. A June projection showed a nearly $51 million budget shortfall, which was addressed in part by the elimination of nearly 300 positions.

Deputy Mayor Pro Tem Maxie Johnson said the budget process was not easy this year. 

"But I believe we worked together to produce a budget that continues to invest in the people who serve our city and the residents who depend on us," he said. "Our employees received a merit increase. We continued our commitment to public safety, protected essential core services, and provided needed resources to our communities." 

The budget boosts public safety funding by $82.3 million, adding 750 police officers over two years to reach 3,800 by the end of fiscal 2028, according to a city statement. The fiscal 2026 budget included a $63.1 million increase. 

Proposition U approved by Dallas voters in November 2024 requires the city to spend at least half of its annual revenue increases on public safety, including to boost police starting pay and maintain a police force of at least 4,000 full-time sworn officers. A lawsuit brought by the Texas Attorney General's Office in February contended the city failed to comply with the measure by shortchanging the amount of increased revenue. 

While the overall property tax rate approved by the council in a 9-6 vote dipped to 69.78 cents from 69.88 cents per $100 valuation, general fund revenue is expected to increase by an estimated $55.46 million. Under a 2025 Texas law, Dallas is not required to adopt a no-new-revenue tax rate because it filed its latest annual financial audit within 180 days of the end of its fiscal year.

"Maybe next year we'll do the hard work, and we'll actually cut the things that we need to, and focus on what is actually essential in government," Council Member Cara Mendelsohn said. "But there's no understanding of how we can end up with a tax rate that's 69 cents-plus when our surrounding cities have a much, much lower rate."

The budget continues a ramp up in funding to $246 million — a 9% increase from fiscal 2026 —for the Dallas Police and Fire Pension System to reach actuarially determined levels by 2030 under a 30-year funding plan approved last year to comply with a 2017 Texas law.

The city council last month did not pursue putting a $500 million taxable pension obligation bond measure on the Nov. 3 ballot to ease general fund cost pressures.

Moody's Ratings, which gave the city's A1 general obligation rating a negative outlook shortly after the passage of Proposition U, revised it back to stable on June 4 after concerns over pension funding eased. The city's GO debt is rated AA-minus by S&P Global Ratings, AA by Fitch, and AA-plus by KBRA — all with stable outlooks.