fbpx

Dallas Is a Financial ‘Sinkhole,’ Study Says

Dallas
Hundred dollar bill in magnifying glass. | Image by AQ_taro_neo/Shutterstock

The City of Dallas is a financial “Sinkhole City,” according to a report by Truth in Accounting.

The analysis, conducted earlier this year, examined the financial condition of 75 cities across the U.S. based on budget figures from the 2021 fiscal year. Cities were ranked based on their “Taxpayer Burden” or “Taxpayer Surplus.”

“A Taxpayer Burden is the amount of money each taxpayer would have to contribute if the city were to pay all of its debt accumulated to date. Conversely, a Taxpayer Surplus is the amount of money left over after all of a city’s bills are paid, divided by the estimated number of taxpayers in the city,” the report said.

The study ranked Dallas No.68 for its taxpayer burden, earning it the designation of a “Sinkhole City.”

“Cities that lack the necessary funds to pay their bills are called Sinkhole Cities, while those that do have enough money are referred to as Sunshine Cities,” the report explains. Fifty of the 75 cities landed in the “Sinkhole” category.

The bottom 10 Sinkhole Cities were New York City, Chicago, Honolulu, Portland, New Orleans, Philadelphia, St. Louis, Dallas, Pittsburgh, and Miami.

Dallas had a taxpayer burden of $14,700 per taxpaying resident.

“Dallas’ elected officials have repeatedly made financial decisions that left the city with a debt burden of $5.9 billion,” researchers wrote. “That burden came to $14,700 for every city taxpayer.”

The analysis found the City’s financial problems “stem mostly from underfunded retirement obligations that have accumulated over the years.”

On the other hand, some cities managed to maintain a taxpayer surplus. For example, Washington D.C., the top “Sunshine City” in the study, had a surplus of $14,000 per taxpayer. San Franciso, Irvine, Los Angeles, and Fresno rounded out the top five “Sunshine Cities.”

Meanwhile, in Dallas, City Manager T.C. Broadnax recently unveiled his proposed $4.6 billion budget for the upcoming fiscal year, as reported by The Dallas Express.

The budget proposal prompted debates over spending cuts among City officials, with some suggesting spending be reduced in this budget to make way for tax cuts next year.

“We’re going to continue to spend more every year and then we’re just going to cut it even more instead of starting to scale down,” said Council Member Chad West during a budget workshop on Tuesday.

Chief Financial Officer Jack Ireland said if council members wish to reduce expenses, now is the time to do so.

“We put forth the recommendation of what we thought was the appropriate level of services,” he said. “It’s a policy decision on what you want to fund.”

The proposed budget includes a property tax rate deduction of $0.0065, going from $0.7458 to $0.7393 per $100 valuation.

However, some officials believe the reduction should be more substantial.

“I am disappointed with the proposed tax rate, that it is not more significant of a decrease,” said Council Member Cara Mendelsohn.

Despite the City cutting property taxes eight years in a row, the property tax payments of Dallas residents continue to climb year after year due to skyrocketing property value estimates, as previously reported by The Dallas Express.

Council members are hosting town hall meetings for citizens to discuss their thoughts on the budget until August 24. The Dallas City Council will vote to adopt a new budget on September 20, and the new fiscal year will begin on October 1.

Support our non-profit journalism

Submit a Comment

Your email address will not be published. Required fields are marked *

Continue reading on the app
Expand article