Decrying ‘Structural Deficit,’ Mendelsohn Shares Her ‘No New Revenue’ Plan to Trim $4.63B Dallas Budget

District 12 Dallas City Council member Cara Mendelsohn is sounding the alarm on the city’s ever-increasing budget. Despite Dallas City Manager T.C. Broadnax’s much-heralded property tax rate decrease, Mendelsohn says the proposed Dallas budget is still a tax increase for property owners — one that could result in dire circumstances.

“It is deeply concerning that we are aware of a significant, impending challenge to our city’s fiscal health and that there is not a proposed course correction before we come to the edge of the cliff,” Mendelsohn wrote. “With the knowledge of what is ahead, we have a strong need for fiscal restraint to prepare ourselves for our financial future, not a budget that proposes additional new spending and accelerates the city more rapidly toward the financial cliff.”

In a Memorandum to Dallas Mayor Eric Johnson, Mendelsohn details the argument for a revised budget that trims the proposed $4.63 billion in city expenditures by $121 million. Mendelsohn’s memo enacts a “No New Revenue” scheme that rolls back department spending by cutting full-time equivalent positions that remain unfilled, department-wide budget cuts, as well as other proposed department efficiencies.

“The FY23-24 proposed budget provides for a slight tax rate reduction, but still increases
the tax burden on residents and businesses,” Mendelsohn wrote in her Aug. 17 memo. “The decisions we make about levels of taxation are important, and we must be ever-mindful of how taxpayer funding is used to provide needed services. In short, we must control spending.”

The memo was applauded by Johnson, who said that he not only agrees with Mendelsohn but that he will be asking Broadnax to produce a revised Dallas budget with Mendelson’s NNR suggestions to present to the full council.

Mendelsohn wrote that the City of Dallas has the highest property tax rate in North Texas. Likewise, only 24 percent of respondents to the ETC Institute’s Community Survey reported that they strongly agree that the city provides a good value for the services residents receive.

Ghost FTEs, Budget Cuts, And Audits

The largest expense for the City of Dallas isn’t infrastructure maintenance or services. It’s employees.

In her memorandum, Mendelsohn says that certain departments in the City of Dallas have been employing de facto budget increases by carrying over the salaries and expenses of full-time employee positions that have a low likelihood of being filled. The so-called “ghost FTEs” are rolled into a department budget, but if those positions are not filled, the budget allocations for those employees are repurposed within the department.

Mendelsohn used the Dallas Police Department as an example. The department wanted to hire 250 officers in the most recent budget but was only able to recruit 185.

“To unrealistically budget and overtax residents for something we know is unlikely to occur and then repurpose those dollars is wrong,” Mendelsohn wrote.

Other cuts include reducing department budgets to Fiscal Year 2022-23 levels, a mandatory 5 percent budget reduction for all departments with budgets that increased by 50 percent or more in the last five years, shifting the burden of low-income senior transportation to DART, and nixing redundant contingency funding.

Another strategy Mendelsohn to reduce spending actually involves spending. The Far North Dallas council member wants to allocate $5 million to hire an outside firm to shake the couch cushions and do an audit.

“Change is difficult, and sometimes old ways become ingrained, or the change needed is too large and
complicated for staff alone to evaluate and initiate,” Mendelsohn wrote. “The future financial health of the City of Dallas rests on the ability of city staff and management to transform our city’s government into an efficient, effective organization.”

Departments that would be targeted include the Dallas Police Department, Dallas Fire Rescue, Planning and Urban Design, Public Works, Environmental Quality & Sustainability, ITS, and Human Resources.

You can access the full memorandum here.