City of Dallas Responds to Projected General Fund Shortfall

The City of Dallas is responding to a projected General Fund shortfall for Fiscal Year 2025-26. Here's what it plans to do to address the gap.

The city addressed the shortfall in a Friday press release. According to the bulletin, current forecasts show expenses exceeding budget by $16.4 million, primarily due to police and fire pay and overtime, and revenues falling $3.8 million below budget due to declining sales tax collections.

Subscribe

Additionally, the city's self-funded Employee Health Benefit Fund is projected to exceed its budget by $13.8 million due to increased medical and pharmacy claims.

To address these challenges, the city announced it will immediately enact the following measures.

• A selective hiring freeze impacting all non-uniform hiring in General Fund departments through the end of the fiscal year limited.
• Overtime restrictions, in particular elimination of non-uniform overtime except for mission-critical needs.
• Spending reductions on non-essential purchases.
• Non-essential travel suspension for both uniform and non-uniform employees until further notice.

When it comes to non-essential spending, the city includes items that can be postponed without affecting core operations, legal compliance, public health or safety, or delivery of critical services.

Mission critical activities, on the other hand, cannot be interrupted, delayed, or eliminated without significant negative impact, including major operational disruptions. That includes inability to meet legal requirements, risks to public health or safety, or failure to deliver key services.

The city will continue to monitor revenues and expenditures as additional cost containment measures may need to be implemented. The city said it remains committed to responsible stewardship of public resources and maintaining delivery of essential services.

"As we navigate resource constraints, fiscal stewardship remains our top priority," said City Manager Kimberly Bizor Tolbert. "We are committed to strengthening efficiency across all operations while ensuring that limited resources are focused on the city's most critical needs."

She added, "These measures are necessary to maintain essential services and uphold our fiscal responsibility to Dallas residents."