Illustration by Jessica Turner.

This is a story about numbers.

The numbers are confusing and contradictory, at times, but they’re real. They’re actual dollars coming out of the pockets of Dallas residential property owners and moving into the City’s bank account.

And there are 560 million reasons why every Dallas residential property owner should be interested in these numbers: $560 million is how much the City of Dallas will collect from residential property owners to fund the City’s 2022-23 fiscal year budget and pay for City services such as street repairs, public safety, arts and employee salaries.

The amount residential property owners hand over each year to the City has increased by 96% since 2012. During that same 11-year period:

  • The U.S. Consumer Price Index, a measure of the increase in cost of living expenses, rose by about 30%.
  • The number of people living in the City of Dallas rose by about 5.4%.
  • The overall City budget rose by about 65%.

Why did the City need to spend twice as much money, when compared with inflation, during a period when the City’s population remained essentially flat?

Ask your neighborhood Realtor: The value of residential property in Dallas more than doubled since 2012, and the City wound up with a bag of our property tax dollars 65% larger as a result.

Data visualization by Renee Umsted.

So how does this all work?

Each year, usually around mid- to late-September, the City Council votes on a property tax rate to be assessed against the taxable value of every residential and commercial property in the City.

City staff try to figure out how much money the City will receive from various taxes and grants, and they propose a budget to spend the money. Ultimately, the City Council votes on the tax rate and the budget.

To some extent, the process is a mystery: City staff toil away for months to determine budget needs and wants, and only after the Dallas Central Appraisal District completes most of its work in determining property values does the Council vote on the new budget.

Anecdotally, if the City receives a larger share of property tax dollars and/or sales tax revenue and/or federal and state grants, the budgeted spending for the City seems to increase. But cash flows can be unpredictable, so some spending decisions seem to lag revenue received or not received.

(Editor’s Note: We reached out four separate days during the past week to Jenna Carpenter, a public affairs officer with the City, to review our data and provide comments about the analysis. Most of the data is sourced from the City’s website and the Dallas Central Appraisal District, but there are inconsistencies with the City’s data and that’s why we reached out for clarification. Carpenter says she passed the information along, but we have yet to receive a return response. When we do, we’ll include the City’s comments in another story linked to this one.)

For the upcoming 2022-23 fiscal year City budget, the Council is considering reducing the tax rate on each $100 of taxable property value to about 75 cents — meaning for every $100,000 in taxable value assessed to your home, you will pay $750 in taxes to the City. (If you own property in Dallas, you’re also paying taxes to Dallas County and Dallas ISD, but that is another story not covered here today.)

In 2012, the average taxable value of a residential parcel in Dallas was $127,551. You would have paid $1,107 in taxes to the City on that property in 2012; the tax rate at that time was .797 per $100 in property value.

In 2022, however, that same $127,551 residential parcel — based on valuation increases during the past 11 years — is valued at $266,542, reflecting a 109% increase in taxable value for residential properties in Dallas over that period.

That residential property owner with a $266,542 taxable value, assessed at the proposed 2022 tax rate of .7458 per $100, will pay $1,988 in taxes to the City.

That’s an increase in property taxes of 80% over 11 years — even as the City talks about how it is reducing the property tax rate by 2.78% from last year and has reduced the tax rate by 6.4% since 2012.

That is correct: The City’s tax rate has been reduced by 6.4% since 2012, but the amount of property taxes the City has collected have increased by about 80%.

Illustration by Jessica Turner.

Look at the issue another way. Over the last 12-month period:

  • In 2021, the City’s average residential parcel was valued at $228,444, and its owner paid $1,820 in property taxes.
  • In 2022, that same property is valued at $266,542, and its owner will pay $1,988 in property taxes — $168 more in 2022 vs. 2021.

Understand the math?

The City Council can both reduce the taxable property tax rate by 2.78% and talk about how it’s holding the line on tax increases. Both statements are technically true.

But under this scenario and the proposed budget for 2022, the City still collects $168 more this year than last year on the same average residential property — a real, out-of-pocket City property tax increase of 9.2% on the average residential property owner over the course of the past 12 months.

How is that possible?

The average residential property in Dallas increased in taxable value by 13.7% from 2021 to 2022; the City is giving us back 2.78% of that taxable value increase by reducing the taxable property rate. But the City is keeping the remaining 10.9% of the overall increase to spend on whatever the City decides to spend it on.

Since 2012, a run of increasing property values — both commercial and residential — has helped fund a rising City budget. And the share of residential property taxes being used to fund the City budget has increased, too.

Residential property tax collections in 2012 amounted to nearly 11% of the City budget. In 2022, residential property owners will contribute nearly 13% of the City budget.

The other 86% of the City budget is funded through other sources, including commercial property taxes, sales tax revenue, usage fees, state and federal grants, and other revenue, too.

Illustration by Jessica Turner.

How does the City allocate the tax money it brings in? That’s what the budget process, occurring now through mid-September, helps resolve.

For example, in 2022, Dallas police and firefighters are scheduled to receive a 4.6% increase in pay this year, according to a Dallas Morning News report, pushing starting police and firefighter to $64,194. Meanwhile, the News reports that the City secretary will receive a raise to $214,240 — a 30% pay increase. And the City manager — who would be fired if five of the 14 Council members (15 total votes, including Mayor Eric Johnson) had their way — will instead be given a raise of 3% and be paid $423,000 for 2022.

By way of comparison, the U.S. president earns $400,000 annually.

If you’ve read this far, you are probably a little bleary-eyed and wondering: What’s the point?

If you are happy with how the City is doing its job, let your Council representative or a City employee know.

If you aren’t happy, this is a good time also to reach out to your Council representative, since the Council will be voting on the budget in the next few weeks.

Click here for contact information to reach your Council rep. And click here if you want to take a look at City budgets from past years.

This story is made possible through Advocate Cares, an initiative of the Advocate as a 501(c)3 non-profit companydedicated to reporting on local news in our neighborhoods. We are actively working to raise special funding for a data-driven City government reporter so that we can report and publish more of these detailed stories about how City government works and how we can help make your voice heard. If you would like to help with donations or ideas, send us a note at advocatecares@advocatemag.com.