According to an analysis by The Dallas Express, the City of Dallas is in a $6.9 billion financial hole.
Based on FY 2023 data, the City’s staggering debt increased by $3.2 billion from the prior fiscal year, per calculations provided by Truth in Accounting.
The individual taxpayer’s burden from the 2023 debt equates to $18,110, compared to $9,600 in 2022, as previously reported by DX. This updated data gives the City a grade of a very low “D,” nearing an “F,” as the “D” taxpayer burden scale ranges from $5,000 to $20,000, according to Truth in Accounting’s metric.
Truth in Accounting reviewed the City of Dallas Annual Comprehensive Financial Report for F Y23 to determine that the City had $2.9 billion to pay $9.9 billion in bills, resulting in a $6.9 billion shortfall. This updated financial analysis now ranks Dallas 69 out of the 75 major cities in the United States for taxpayer debt burdens, with the only cities scoring worse than Dallas being New Orleans, Portland, Philadelphia, Honolulu, Chicago, and New York City.
Ariel Wallace, a public information officer for the City of Dallas, said officials will “continue to meet all financial obligations.”
“The Dallas Express news story on Dallas’ debt commingled governmental activities and business activities which are not only supported by resident taxes but are also supported by charges for service based on business and resident usage as well as several other revenues besides property tax,” Wallace told DX.
“Additionally, the report includes the actuarial accrued liability of employee and retiree pensions and health care benefits, two long-term liabilities,” Wallace continued. “The pension liabilities will be funded over the next 30 years in compliance with the Texas Pension Review Board requirements.”
Previous calculations for FY 22 noted that Dallas had the highest taxpayer debt burden of any major city in Texas. Sheila Weinberg, Truth in Accounting founder and CEO, previously told DX that “most” of this debt is from the City’s pension system.
“They offered employees pensions as part of their compensation cost but then did not properly fund those pension benefits in the period that the employee earned those benefits,” Weinberg said.
The Dallas Police & Fire Pension System system has been estimated to have $3.5 billion in unfunded liabilities, as previously reported by DX. This pension crisis comes as the Dallas Police Department struggles with a staffing shortage. Despite a City report recommending a force of 4,000 officers, DPD fields only around 3,000. Furthermore, this fiscal year, DPD budgeted only $654 million due to City leaders spending considerably fewer taxpayer dollars on policing than other high-crime jurisdictions, such as Chicago, Los Angeles, and New York City.
In 2022, an actuary recommended that the City contribute $107,167,000 to the Employees Retirement Fund and $228,658,000 to the Dallas Police and Fire Pension. The City partially approved this funding, which was 36% short of the recommendation for the Employees Retirement Fund and 25% short of the Dallas Police & Fire Pension System.
“Those costs were pushed off onto future taxpayers,” Weinberg previously told DX.