Dallas City Manager Kimberly Bizor Tolbert has presented a $5.6 billion recommended budget for fiscal year 2026-27, developed after the city identified a previously projected $50.9 million General Fund shortfall.
The recommendation would eliminate 296 budgeted positions and increase spending on police and fire. It does not propose an increase to the city’s property-tax rate.
The recommended budget is not final. The Dallas City Council will review and potentially amend the proposal before a scheduled final vote on September 16.
The recommendation follows months of cost-control measures as Dallas officials responded to lower projected sales-tax revenue and higher expenses. In a June 18 memorandum, the city said its preliminary FY2026-27 General Fund revenue estimate had been reduced to approximately $2.02 billion and identified additional expenses associated with public safety, contracts, pensions, employee health benefits and police hiring.
$50.9 Million Gap Drove Budget Reductions
The city projected approximately $2.02 billion in FY2026-27 General Fund revenue, about $33 million below the amount included in its earlier budget plan.
The city attributed much of the decline to weaker sales-tax expectations. Its June 18 memorandum reduced the projected FY2026-27 sales-tax revenue from $497.9 million to $479.6 million, a reduction of $18.3 million. The city also identified additional costs for public-safety technology, contracts, pensions, employee health benefits and a planned police hiring program.
The city said those revenue and expenditure changes resulted in a projected $50.9 million General Fund shortfall that needed to be addressed during development of the City Manager’s recommended budget.
The recommended budget does not propose an increase to the city’s property-tax rate. That does not necessarily mean an individual property owner’s total tax bill would remain unchanged, because a tax bill can change when the taxable value of a property changes even if the city’s tax rate does not.
296 Positions Targeted for Elimination
One of the most consequential portions of the proposal is the elimination of 296 budgeted positions.
The number does not mean 296 employees have already been fired.
The 296 positions include approximately 108 currently occupied positions, according to reporting on the recommended budget. The number could change as the City Council reviews the recommendation. The proposed elimination of 296 positions therefore should not be described as 296 completed layoffs; the recommendation still must go through the council’s budget process.
The proposed reductions follow several cost-cutting measures already taken by the city.
In April, Dallas imposed a selective hiring freeze for certain non-uniformed General Fund positions, restricted overtime and spending, and suspended nonessential travel after officials projected a shortfall in the current fiscal year, as previously reported on by The Dallas Express.
In July, thousands of General Fund employees began taking unpaid furlough days. Police officers, firefighters, paramedics and 911 dispatch employees were exempt from those furloughs, DX reported.
The Dallas Express also reported in May that personnel costs account for roughly 72% of Dallas’ overall budget, making employee compensation, overtime, pensions and healthcare costs a central component of the city’s effort to reduce spending.
Public Safety Remains Priority
The proposed reductions come as Dallas continues to increase spending on public safety.
The recommended budget would continue to prioritize public safety, with approximately $1.3 billion — more than 60% of General Fund spending — allocated to public safety. Police and fire spending would increase 6.9%, compared with a 4.1% increase in the overall General Fund, according to reporting on the recommendation.
The city’s FY2025-26 budget likewise identified public safety as its largest General Fund investment, with $1.3 billion allocated to public-safety-related activities.
This emphasis follows the City Council’s previously established budget priorities and voter-approved requirements concerning police staffing and compensation.
In its June budget update, the city specifically identified a planned hiring program for 400 police officers in FY2026-27 as one of the factors contributing to General Fund expense pressure.
Public safety also has a unique place in Dallas’ budget because of Proposition U, the charter amendment approved by Dallas voters in 2024.
Proposition U amended the Dallas City Charter to establish requirements concerning police staffing and compensation and to direct certain increases in unrestricted city revenue toward the Dallas Police and Fire Pension System and specified public-safety objectives.
The charter provision calls for the number of full-time sworn Dallas police officers to be increased to at least 4,000 and for the ratio of officers to Dallas residents to be maintained or increased.
The Dallas Express previously reported that the city’s FY2025-26 budget projection remained below the 4,000-officer target established by the charter amendment.
The requirements have also become the subject of litigation. Texas Attorney General Ken Paxton sued the City of Dallas in February, alleging violations of Proposition U. The city has contested the allegations in court. The Dallas Express previously reported on Paxton’s lawsuit and Dallas’ response to the litigation.
The new budget therefore arrives as Dallas attempts to reduce costs while increasing public-safety spending and addressing the requirements established by Proposition U.
Parks and Recreation Have Already Faced Proposed Cuts
The pressure is not limited to city administration.
The Dallas Park and Recreation Department previously considered more than $13 million in reductions for FY2026-27. The proposed changes included potentially closing four community centers, reducing hours at recreation and aquatic facilities and cutting park maintenance, DX reported.
Those proposed reductions were part of the broader budget-development process rather than a final decision by the City Council.
Budget Grows Despite Cuts
The size of the proposed budget is notable because the city is eliminating positions while overall spending increases.
The increase in the overall budget does not mean that every department will receive additional funding. The recommended plan simultaneously increases spending in some areas while eliminating positions and reducing costs in others.
Dallas had already approved a $5.2 billion FY2025-26 budget last year.
Mayor Eric Johnson criticized that budget at the time, calling for greater reductions in what he described as unnecessary spending. The Dallas Express reported that Johnson argued Dallas needed to focus on basic services, public safety, streets and tax relief.
City Council Has Yet to Approve the Plan
The City Manager’s recommended budget is the beginning of the final stage of the budget process, not the end.
According to the City of Dallas’ FY2026-27 budget development timeline, the City Council is scheduled to consider budget amendments on September 2 and take its second-reading vote on the budget on September 16, when it is also scheduled to consider the property-tax rate and related budget items.
Dallas has scheduled 14 in-person district budget town halls, 14 virtual district meetings and one citywide telephone town hall from August 11 through August 25. The meetings are part of the city’s public-input process for the City Manager’s recommended FY2026-27 budget.
The city’s official FY2026-27 budget page provides the budget-development documents and materials residents can use to review the proposal.
For Dallas residents, the next several weeks will determine whether the $5.6 billion proposal becomes the city’s FY2026-27 spending plan.
The council can amend the recommendation, and the final budget could differ from the proposal released by Tolbert.
Under the City Manager’s recommendation:
- The FY2026-27 spending plan would total approximately $5.6 billion;
- 296 budgeted positions would be eliminated, including approximately 108 occupied positions;
- The recommendation was developed after the city identified a projected $50.9 million General Fund shortfall;
- The recommended budget would not increase the city’s proposed property-tax rate;
- Police and fire spending would increase; and
- The City Council is scheduled to consider amendments before its planned September 16 budget vote.
The budget debate will begin in earnest when Dallas City Council members hold their district town halls starting Tuesday.
The final spending plan — and the extent of the proposed job and service reductions — will not be known until the City Council completes its review and votes in September.
Provided by Dallas Express
