By Judith Tankel, Vice President, Public Policy
Average reading time: 3.5 minutes
On Thursday, Sept. 18, the Dallas City Council approved a Fiscal Year 2025-2026 budget of $5.2 billion, the largest in city history. The new budget outlines Dallas’ priorities for the year ahead, and the adoption process illustrated the challenges the City faces as it works to meet residents’ needs and attain long-term financial stability.
Each year, the City of Dallas begins developing its budget in the spring, when departments submit funding requests based on council priorities, resident feedback, and performance metrics. Over several months, city staff and council members then refine the budget proposals through workshops, public hearings, and community engagement before final adoption in September, before the start of the new fiscal year on October 1.
According to community surveys during this process, public safety remains one of the top priorities for residents across Dallas, along with street and infrastructure improvements and social services. This year, City Manager Kimberly Bizor Tolbert pledged a shift towards priority-based budgeting, a model designed to align limited resources with measurable goals and community outcomes and improve transparency.
Formulated over months of collaboration among City Council members, city staff, residents, and community organizations, the budget process offers the business community a key opportunity to provide input on Dallas’ economic future. Through this process, city and community leaders worked to align priorities to ensure the city remains globally competitive and an attractive place to live, work, and do business.
Balancing priorities and fiscal considerations
This year’s budget cycle unfolded amid new and continuing fiscal pressures. In November 2024, voters approved Proposition U, a charter amendment that requires the city to direct at least half of any new revenue to the Dallas Police and Fire Pension System. It also mandates that the city increase the number of sworn police officers to “at least 4,000,” requiring the hiring of close to 900 additional officers.
In the wake of the financial constraints Proposition U created, it was listed as one of the reasons for Dallas’ credit outlook moving from “stable to negative,” in a report from Moody’s Investor Service. While the outlook is not a credit rating downgrade, it is “an indication of an expected direction of the credit rating movement to be reviewed,” City Manager Tolbert stated in a memo. Should Dallas’ credit rating ultimately decline, higher debt servicing costs could slow or scale back infrastructure projects that businesses depend upon for both mobility and growth.
Additionally, broader economic conditions have compounded these challenges. Inflation, tariffs, and supply-chain disruptions have driven up the cost of materials utilized in city maintenance and infrastructure projects. In a June City Council briefing, the City’s Director of Transportation and Public Works, Dr. Gus Khankarli, reported that the cost of new street signs has increased by approximately 300% due to rising aluminum prices.
Within these constraints, City Manager Tolbert, presiding over her first full budget cycle, worked to craft a spending plan aimed at maintaining core city services while balancing fiscal responsibility. The adopted tax rate of 69.88 cents per $100 valuation marks the city’s tenth consecutive rate reduction, reflecting ongoing efforts to maintain affordability for city residents while also directing funds to public safety and street improvements.
What the budget means for business
The FY 2025-26 budget presents both opportunities and challenges for businesses in the Dallas Region. The city’s continued focus on public safety and infrastructure supports economic vitality and development by enhancing neighborhood stability and improving mobility for the workforce. These steps help ensure that Dallas remains an appealing place for investment, talent attraction, and continued innovation. Safer streets and more reliable infrastructure systems are essential to workforce access to employment, supply chain efficiency, and business growth.
The city’s ongoing commitment to reducing the property tax rate, even amid financial constraints, aims to sustain competitiveness for commercial property owners and businesses. For employers facing higher operating costs and tight margins, the effort signals recognition of the economic pressures shared by the private sector.
Ongoing engagement from the business community in the budgeting process will be critical moving forward, as it helps identify how city investments and policies impact competitiveness, workforce readiness, and regional growth. Through this involvement, business leaders can help ensure that city spending decisions strengthen Dallas’ foundation for long-term economic success.
Looking ahead
In the months ahead, city leaders and residents will closely monitor how spending allocations and cuts from this year’s budget are balancing efficiency, accountability, and responsiveness to the needs of Dallas. The city will continue to navigate rising costs and economic pressures, limited revenue flexibility, and unpredictable tax revenue.
For the business community, the city’s evolving budget approach will shape the local environment for investment, growth, and competitiveness in the years to come. Staying informed and engaged in the city’s fiscal direction will allow business leaders to hold the city accountable to maintaining infrastructure, managing affordability, and supporting public safety—all factors that influence the region’s continued ability to attract talent and sustain economic momentum.
To learn more about how local policy developments affect the Dallas business community, please reach out to me at jtankel@dallaschamber.org.