The Dallas City Council rejected a motion to lower the property tax rate ceiling on Wednesday, with some council members citing “equity” concerns.
Council members voted to establish a property tax ceiling of $0.7358, rejecting Council Member Cara Mendelsohn’s proposal to set a lower ceiling of $0.6813 per $100 valuation in a 10-4 vote. The dissenting votes were cast by Mayor Eric Johnson and Council Members Mendelsohn, Gay Donnell Willis, and Kathy Stewart.
Wednesday’s vote simply established the highest property tax rate that can be adopted. The tax rate could still be lowered moving forward. A public hearing will be held on September 20, but this is the same day the property tax rate and the FY23-24 budget will be finalized by the City Council.
As previously reported by The Dallas Express, Mendelsohn published a memo last week urging City leaders to exercise “fiscal restraint” and lower taxes on Dallasites by considering a revised budget based on a “no-new-revenue” (NNR) tax rate scenario. However, this idea was not supported by the majority of her colleagues.
Council Member Carolyn King Arnold said she would only support “a tax rate that will support … the equity principle.”
“We committed to serving historically underserved communities, and this tax rate needs to speak to that,” she said. “When you cut [taxes], we bleed in the southern sector. When you cut [taxes], we die in the southern sector. When you cut [taxes], we die in historically underserved communities.”
The City budget is required to be balanced, meaning that significant cuts to property taxes would necessitate spending reductions as well. Chief Financial Officer Jack Ireland previously said $123.6 million in spending would need to be eliminated if Mendelsohn’s proposal were adopted.
Arnold argued that lowering property taxes “too much” would require the City to cut services geared toward “underserved communities.” Council Members Omar Narvaez and Adam Bazaldua voiced similar concerns, saying that further input from constituents was needed before moving forward with bigger tax cuts.
Broadnax’s proposed budget raises City spending to $4.6 billion, as previously reported by The Dallas Express. Mendelsohn maintained the City should not exceed the $4.5 billion budget adopted last year.
Mayor Johnson agreed and said a lower tax rate and tighter budget are needed to “turn the ship around” and redirect the City of Dallas toward financial stability. He said Mendelsohn’s proposal is the only one that would make that happen.
“The City of Dallas is headed toward a financial iceberg,” Johnson said on social media after the vote. “Today, there was one motion on the floor that would reverse course and actually lower your city property tax bill — it was rejected by the majority of the City Council.”
While the $0.7393 rate proposed by Broadnax and supported by the majority of the council would reduce the City property tax rate by $0.0065 from the year previous, Mendelsohn noted that it would not reduce the property tax bills of Dallas homeowners.
As previously reported by The Dallas Express, the City has reduced its property tax rate for seven years in a row, yet property tax payments continue to rise due to skyrocketing property value estimates.
