FY 2019–20

effective tax ratE scenario

EFFECTIVE TAX RATE SCENARIO

COMPLYING WITH THE FINANCIAL MANAGEMENT PERFORMANCE CRITERIA IS A PRIORITY FOR CITY MANAGEMENT On December 13, 2017, the City Council adopted a new criterion for the City’s Financial Management Performance Criteria (FMPC) related to the effective tax rate. Refer to the box to the right for more details regarding FMPC #24. This scenario is provided to comply with the FMPC. What is the effective tax rate?

The effective tax rate is the rate that generates the same amount of revenue in the next fiscal year on property that was taxed in the previous fiscal year. The calculation excludes the value of new construction and other adjustments. The Dallas County Tax Office calculates this rate. What is Dallas’ effective tax rate for FY 2019-20?

The proposed General Fund budget for FY 2019-20 totals $1.44 billion and is based on a property tax rate of 78.00¢ per $100 valuation. The effective tax rate is 74.72¢, or 3.28¢ less than the proposed tax rate that supports the General Fund budget. To lower the tax rate to 74.72¢ and maintain a balanced budget, the City Council would need to reduce General Fund revenue by $45 million and identify General Fund expense reductions of the same amount. The table below shows the reduction necessary to achieve an effective tax rate budget. A larger reduction would be required in the FY 2020-21 planned budget since the tax base is assumed to continue to grow in the planned year, as well.

Effective Tax Rate Scenario FY 2019-20 FY 2020-21

Recommended Budget $1,442,850,000 $1,493,285,000 Revenue Decrease $(44,962,989) $(47,759,687) Alternative Scenario $1,397,887,011 $1,445,525,313

FMPC #24

“The City Manager will develop an estimated effective tax rate budget scenario and, if different from the City Manager’s recommended budget required by Chapter 11, Section 1 of the City Charter, will provide it to the City Council at the same time. The estimated effective tax rate budget scenario will include a prioritized list of services/expenses that could be funded and a prioritized list of service/expenses that could not be funded with the estimated effective tax rate.”

EFFECTIVE TAX RATE SCENARIO

Reductions by Strategic Priority

The next pages list expenses included in the proposed FY 2019-20 budget that City Council could choose not to fund if it adopts an effective tax rate and revenue is reduced by $45 million. The list is provided in the order of least to most impactful, so the expense listed as number one is the first expense we propose eliminating, if necessary. Summarized by Strategic Priority, the list includes: • Public Safety: $24.2 million • Mobility Solutions, Infrastructure, and Sustainability: $4.9 million • Economic and Neighborhood Vitality: $100,000 • Human and Social Needs: $650,000 • Quality of Life: $14.8 million • Government Performance and Financial Management: $350,000

Rank Department DescriptionFY 2019-20

Expense FY 2020-21

Expense

1 Public Works

Eliminate City funding for maintenance of TxDOT rights-of-way. TxDOT pays the City for 12 litter and three mow cycles in the amount of $1,009,795. The City currently spends an additional $1,152,393 to supplement TxDOT funding for enhanced maintenance. The proposed budget already includes a reduction of $402,393. This would eliminate the remaining $750,000 in City funding.

750,000 750,000

2 Public Works Eliminate City funding for US-75 median and planter maintenance. 421,880 421,880

3 TransportationEliminate funding for the Dallas Streetcar operated by DART in the Oak Cliff neighborhood, which receives 1% of Dallas' local option sales tax. FY20 sales tax forecast for 1% is $325.6 million.

1,103,500 1,103,500

4 Public Works Eliminate funding for bike lanes. 1,000,000 1,000,000

5 Public Works Reduce pay-as-you-go cash funding for street and alley maintenance. 1,500,000 1,500,000

6 Human ResourcesEliminate funding for the Mayor's Intern Fellows Program ($120,000) and the new undergraduate/graduate intern program ($230,000).

350,000 350,000

7 Animal Services Eliminate the PetSmart adoption center. 250,000 250,000 8 Community Care Eliminate City financial support for the MLK Parade. 50,000 50,000

9 Economic Development Eliminate City funding for the Dallas Film Commission. 100,000 100,000

10 Public Works Eliminate the Mowmentum program. 100,000 100,000 11 Cultural Affairs Eliminate City stipend to ATTPAC for operating support. 2,500,000 2,500,000

12 Cultural AffairsEliminate City stipend to ATTPAC for enhanced cultural services including debt assistance.

1,500,000 1,500,000

13 Cultural AffairsEliminate City stipend to Dallas Museum of Art, which represents 0.72% of their $29.7 million budget.

213,979 213,979

14 Cultural AffairsEliminate City stipend to Perot Museum of Nature and Science, which represents 0.53% of their $27.9 million budget.

148,098 148,098

15 Cultural AffairsEliminate City stipend to Dallas Opera, which represents 0.52% of their $17.7 million budget.

91,500 91,500

16 Cultural AffairsEliminate City stipend to Dallas Theater Center, which represents 0.45% of their $10 million budget.

45,004 45,004

17 Cultural AffairsEliminate City stipend to Dallas Holocaust Museum, which represents 0.27% of their $11 million budget.

30,000 30,000

18 Park and Recreation

Eliminate stipend to Dallas Arboretum. The total operating budget for the Arboretum in FY19 is $24,616,137, and the City stipend accounted for 1.60% of their budget. The FY20 proposed budget increases stipend from $394,098 to $406,098.

406,098 406,098

19 Welcoming Communities Eliminate funding to provide grants to nonprofit service organizations for civil legal services to immigrants administered by Welcoming Communities and Immigrant Affairs.

100,000 100,000

20 Management ServicesEliminate contract services in the Office of Resiliency, Office of Equity, and Office of Innovation.

- 400,000

21 Animal ServicesReduce Dallas Animal Services staff that provide overnight coverage by three nights per week.

248,303 248,303

22 Park and Recreation

Reduce stipend to Dallas Zoo to an amount representing 40% of their operating budget. The total operating budget for the Zoo in FY19 is $28,297,846, and the City stipend accounted for almost 53% of their budget. The FY20 proposed budget increases stipend from $14,945,940 to $15,349,848.

4,000,000 4,000,000

23 Park and Recreation

Close nine community pools not scheduled to be upgraded to aquatic centers: Bonnie View, Everglade, Glendale, Grauwyler, Jaycee Zaragoza, Martin Weiss, Pleasant Oaks, Tommie Allen, and Walnut Hill. Maintain the other 10 aquatic facilities, including the aquatic centers, Bachman Therapeutic Recreation Center, and Bahama Beach.

307,805 307,805

24 Community Care Eliminate teen pregnancy prevention program. 300,000 300,000

25 Park and Recreation Eliminate funding for Southern Skates (no revenue to General Fund). 193,715 193,715

26 Park and RecreationClose Fruitdale Recreation Center (CD #4). Attendance in FY18 was 4,350, ranking 43 out of 43.

317,500 317,500

27 Park and RecreationClose Marcus Annex Recreation Center (CD#13). Attendance in FY18 was 8,750, ranking 42 out of 43.

317,500 317,500

Rank Department DescriptionFY 2019-20

Expense FY 2020-21

Expense

28 Park and RecreationClose MLK Recreation Center (CD#7). Attendance in FY18 was 10,807, ranking 41 out of 43.

317,500 317,500

29 Park and RecreationClose Thurgood Marshall Recreation Center (CD#3). Attendance in FY18 was 11,004, ranking 40 out of 43.

- 317,500

30 Park and RecreationClose Umphress Recreation Center (CD#5). Attendance in FY18 was 11,667, ranking 36 out of 43.

- 317,500

31 Park and RecreationClose Willie B. Johnson Recreation Center (CD#10). Attendance in FY18 was 13,356, ranking 32 out of 43.

- 317,500

32 Park and RecreationClose Nash Davis Recreation Center (CD#6). Attendance in FY18 was 15,518, ranking 30 out of 43.

- 317,500

33 Park and RecreationClose Exall Recreation Center (CD#14). Attendance in FY18 was 16,105, ranking 29 out of 43.

- 317,500

34 Park and RecreationClose Campbell Green Recreation Center (CD#12). Attendance in FY18 was 16,745, ranking 27 out of 43.

- 317,500

35 LibraryClose Kleberg-Rylie Branch Library (CD#8). Attendance of 35,923 makes it number 29 out of 29 for attendance.

850,000 850,000

36 LibraryClose Fretz Park Branch Library (CD#11). Attendance of 43,363 makes it number 28 out of 29 for attendance.

850,000 850,000

37 LibraryClose Grauwyler Park Branch Library (CD#2). Attendance of 47,148 makes it number 27 out of 29 for attendance.

- 850,000

38 Community Care Eliminate the Earned Income Tax Credit program. - 200,000

39 Park and RecreationEliminate the Park Ranger program, including existing resources ($641,268) plus resources planned for FY20 and FY21.

924,839 1,200,431

40 Police Eliminate the DPD mounted unit. 275,000 275,000

41 Code Compliance Eliminate all funding for demolition of substandard structures. - 1,022,027

42 Code ComplianceReduce staffing in Neighborhood Code Compliance by20 inspectors in FY 2019-20 and 19 inspectors in FY 2020-21 (total of 39)

1,284,360 2,478,439

43 Non-Departmental Eliminate funds set aside as reserve for potential increased police hiring or to address recommendations from staffing study.

2,250,000 1,000,000

44 Non-Departmental Eliminate police technology projects to be determined through IT Governance process.

2,000,000 -

45 Police Eliminate purchase of marked squad cars in FY20. 3,500,000 -

46 Fire-RescueEliminate funding for a complete second set of personal protective equipment for each member of the Fire-Rescue department.

5,300,000 -

47 Homeless SolutionsEliminate funding for the Office of Homeless Solutions inclement weather shelter program.

200,000 1,000,000

48 Fire-RescueClose one fire station, including one engine and one ambulance, and eliminate personnel. DFR chief will determine fire station to close based on call volume and impact on response time.

3,500,000 3,500,000

49 Fire-RescueClose one fire station, including one engine and one ambulance, and eliminate personnel. DFR chief will determine fire station to close based on call volume and impact on response time.

- 3,500,000

50 Police Eliminate 50 police officer positions through attrition. - 4,700,000

51 Police and Fire-RescueReduce intermediate, advanced, and master-level certification pay of $50-$400-$600 to $50-$275-$375 per month from the Meet and Confer proposal.

7,366,408 7,366,408

Total 44,962,989 47,759,687

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