Dallas is facing a $6.5 million budget shortfall caused by disputed property appraisals. That’s according to a briefing presented to the city council on Wednesday.
Ninety percent of Dallas property appraisals were certified — but other owners decided to contest how much property tax they owe the county.
“…And so we’re subject to litigation, we have no control over what happens,” Budget and Management Services Director Janette Weedon said during the meeting.
The proprieties that are still under dispute “have a total value of more than $50 billion,” according to the briefing. And now the city’s property tax revenue is projected to be almost $7 million under budget.
Officials said along with the revenue shortfall, some city departments are forecasted to be overbudget. That includes Dallas Animal Services and the city’s park and recreation department.
This isn’t the first time city officials will have to work through the summer to remedy a budget gap. Last year officials faced the same issue — with a larger deficit of almost $40 million.
The news comes just as the majority of the council was reelected for another term — and with high-dollar budget items on the horizon.
That includes paying into the historically — and grossly — underfunded Dallas Police and Fire Pension System and complying with Proposition U, a controversial city charter amendment passed last year.
“What it requires is that we take at least 50% of our year-over-year growth in unrestricted revenue, and to that extent that revenue is available that we fund the Dallas Police and Fire Pension System,” Chief Financial Officer Jack Ireland said.
If there’s anything left, those funds will go to increasing officer salaries and increasing the number of police officers.
Ireland said after calculating the city’s year-over-year growth — and cutting it in half, per Proposition U — officials would have around $34 million dollars.
Proposition U says that the pension system is the main priority. The city’s pension obligation for this year is hundreds of millions of dollars.
“…Therefore, there are no dollars remaining after we put it towards that first use,” Ireland said.
Dallas HERO, a group with less than transparent leadership and donors, was the architect of Proposition U.
And while the organization and a small group of vocal individuals backing up Dallas HERO’s claims online led a successful campaign — the proposition passed by just 50.52% of the votes on election night last year.
It’s unclear whether the policy had — or still has — widespread support from Dallas residents, but the city is on the hook to comply. That means spending taxpayer dollars.
During the meeting, District 12 Council Cara Mendelsohn pointed to the city of Houston’s recently announced budget — and an accounting firm brought on to find inefficiencies inside city departments.
“So, if you’re not able to do it, I know I had proposed at one point $5 million to do very in-depth analysis especially for our largest and most expensive departments,” Mendelsohn said. “If we’re not able to get the kind of efficiencies organically, I hope that you will again consider that.”
The nonprofit publication Houston Landing reports city officials proposed a budget that would close “a projected $220 million deficit without implementing new fees or taxes for residents.”
But that may have come at the expense of other services. Like a $1.8 million cut from Houston’s libraries and millions more from health funding, according to reporting from Houston Public Media.
City officials said there would be another briefing in June to dig deeper into the details — and added by then, they should have a better understanding of the city’s financial standing.
Got a tip? Email Nathan Collins at ncollins@kera.org. You can follow Nathan on Twitter @nathannotforyou.
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