Dallas Shares Biennial Budget Key Takeaways

Dallas is heading into its next budget cycle with a problem that is easy to describe and hard to fix. The city built a two-year spending plan last summer, but the first big update now says the FY 2026-27 budget no longer balances. Revenue is growing more slowly than expected. Costs are still climbing. So the real news here is not that Dallas has started its biennial budget process — it’s that the numbers underneath that plan have gotten worse. (content.govdelivery.com) ### What changed this week? On May 6, Dallas staff gave City Council a preliminary briefing on the FY 2026-27 and FY 2027-28 biennial budget. The city said the FY 2026-27 planned budget — drafted in summer 2025 — will be the base for the next recommended budget, but that base is now out of balance because of slower revenue growth and higher cost pressure. A fuller recommended budget goes to council on August 11, 2026. (content.govdelivery.com) ### How big is the budget they’re reworking? The planned FY 2026-27 budget totals $5.39 billion across all funds, with a General Fund of $2.05 billion. That “all funds” number matters because it includes more than the city’s day-to-day core services — things like enterprise operations and capital spending sit in there too. But the real press(content.govdelivery.com) lot of basic city services get sorted against one another. (content.govdelivery.com) ### Why did the balance get worse? Turns out Dallas was already tightening spending before this briefing. On April 24, the city announced immediate cost controls because the current FY 2025-26 General Fund was projecting a shortfall. Expenses were running $16.4 million over budget, revenues were $3.8 million below budget, and the employee he(content.govdelivery.com)n-uniform hiring freeze, overtime restrictions, spending cuts, and a pause on non-essential travel. (dallascitynews.net) ### What’s driving the squeeze? The short version is payroll and softer tax growth. Dallas said the current-year pressure is coming largely from police and fire pay and overtime, while sales tax is also underperforming. That matters for the next budget because a city does not get to wall off one bad year from the n(dallascitynews.net)what this May briefing is doing. (dallascitynews.net) ### What does council want protected? Council’s priority exercise gives a pretty clear answer. “Safe” ranked as the top foundational pillar. Members also showed strong support for streets, sidewalks, alley maintenance, and homelessness response. A majority also favored keeping the current property tax rate, which is notable because Dallas has spent years leaning into tax-rate reductions. (content.govdelivery.com) ### Why is the tax-rate piece a real tension? Because last year’s adopted FY 2025-26 budget kept the city’s tax-cut streak going. Council approved a $5.20 billion budget, cut the property tax rate to 69.88 cents per $100 of valuation, and increased the senior and disability homestead exemption to $175,000. That was a politically easy story w(content.govdelivery.com)eep rising. (dallascitynews.net) ### What happens next? Dallas says public engagement will continue through surveys and hearings, with another update to council on June 17, 2026. The big date is August 11, when City Manager Kimberly Bizor Tolbert is set to present the recommended budget built from these revised assumptions. That is when residents will see whether the city can protect safety and infrastructure priorities without deeper cuts elsewhere. (content.govdelivery.com) ### Bottom line Dallas did not just share budget “key takeaways.” It warned that the next year of its two-year plan no longer works on paper. Now the city has three months to turn a $5.39 billion outline into something balanced — without blowing up the services council says matter most. (content.govdelivery.com)