Dallas Budget Crisis Presents Problem Current Officials Have Never Seen

City jobs and services are on the line as city officials navigate a budget shortfall

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A budget crisis the likes of which current Dallas officials have never seen is brewing at city hall.

"We’re talking about major, historic devastation,” Mayor Eric Johnson said. He went on to call the plunge in sales taxes a "unique detrimental impact.”

The statement came during a video conference briefing on the financial situation Wednesday.

Several public speakers from southern Dallas called in to say they would not accept service cuts in their part of the city.

“This was happening to us before this coronavirus, so I think coronavirus is going to be an excuse they will use,” said Rev. Ronald Wright, a community activist.

An earlier announcement of a $25 million drop in sale tax revenue from so many closed stores has grown to a $33 million general fund shortfall in the current city budget with additional declines in fees for city services.

The general fund pays for most basic city services like public safety, code enforcement, parks, recreation centers and libraries.

Public safety may be the safest area from budget cuts. In fact, the city hopes to add more than 100 police officers to the current year budget with improved hiring and retention. Other areas are less secure.

“I think everything is on the table. I would say the last thing I want to do is raise taxes because I want people to have money in their pocket,” Dallas City Council member Paula Blackmon said.

Worse than the general fund, the aviation department, which operates Dallas Love Field, faces a $40 million shortfall.

Convention and event services, which operates the Kay Bailey Hutchison Convention Center, received $47 million less revenue than budgeted due to less convention rent and far lower hotel occupancy tax dollars.

All of these declines could involve employee layoffs or furloughs.

“We've got some really terrific employees,” councilman Lee Kleinman said. “We made a commitment to them. We've got to figure out how we can maintain them.”

Some economists in news reports have said the coronavirus downturn could be short.

Dallas Chief Financial Officer Elizabeth Reich said it was very difficult to predict.  She said it could be worse than it has been so far if the economy does not rebound and the coronavirus prompts a return to stay-at-home orders.

“It is unlike anything we've seen before,” Reich said.

The city has received relief money from the federal government to pay for some coronavirus-related expenses. It could pay for things like police and fire overtime and code enforcement related to social distancing.

“We are working department by department, employee by employee to ensure that all of their time since March 1 is appropriately allocated in our timekeeping and payroll system,” Reich said.

So far, the federal government has refused to allow the use of that money to reimburse city revenue declines.

Reich said the shortfalls seen the past two months are worse than the Great Recession of 2008.

Council member Cara Mendelsohn said she thinks this pandemic has the potential to change thinks much more than that recession.

“I think that was a temporary pause. And we are forever changed and if we don’t look at it in that comprehensive way, we’re not going to be ready for the future,” Mendelsohn said.

Wright said residents would keep pressing for service.

“We certainly want to be treated fairly, like the rest of the city, especially if we are paying taxes,” he said.

Southern and West Dallas council members said they heard the message from residents Wednesday.

“It’s not going to be easy. It’s not going to be brief. But it’s got to be fair. And you’ve got to be sure everybody suffers a little pain,” councilman Casey Thomas said.

City Manager T.C. Broadnax said recommendations were being drafted for city council review on necessary changes.

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