A new report by Truth in Accounting sheds light on the City of Dallas’ financial position, and the results show much room for improvement.
In the ninth annual Financial State of the Cities report, which assesses the fiscal health of the country’s 75 most populous metros, Dallas received a not-so-impressive “D” rating. Compared to last year, the report noted that Dallas’ financial state has deteriorated.
“Based on our analysis of its audited financial report for fiscal year 2023, its financial hole deepened with a need for $5.9 billion to cover its bills. This created a Taxpayer Burden™ of $13,300, earning the city a ‘D’ grade from Truth in Accounting and solidifying its status as a Sinkhole City,” read the February 2025 report.
Dallas’ shortfall stems from the $9.7 billion in expenses the City incurred with only $3.9 billion in available cash to cover the costs. At the same time, the “D” grade is given to cities where the taxpayer burden ranges from $5,000 to $20,000. For Dallas, if we took all the cash needed to pay the City’s outstanding bills and divided it by the number of taxpayers, each would owe over $13,000.
Notably, despite the City’s revenue exceeding expenses by more than $759 million, the financial condition worsened by $2.2 billion overall. This was largely attributed to unrealized investment losses in the City’s pension system. These losses stemmed from certain pension investments recording substantially lower market values, driving liabilities higher.
The report also highlighted the contribution of rising salaries and benefits across all government positions on expanding expenses.
“With growing pension liabilities and rising operational costs, Dallas must carefully manage its financial resources and long-term investments. Strategic planning will be essential to maintain fiscal health while ensuring continued support for essential public services and infrastructure,” the report recommended.
Dallas landed at No. 65 out of the 75 cities assessed in the annual study.
Last year, Sarah Zubiate Bennett, host of “Let’s Talk Local,” sat down with fiscal expert Mark Moses to discuss his book The Municipal Financial Crisis. In the discussion, Moses talked about the challenge of “systemic scope creep” and the tendency for local governments to stifle sectors they enter, smothering competition and killing innovation.
The result?
You get systems like DART. Despite having a modest 6% ridership, DART remains on life support, with taxpayers “footing the bill,” explained Zubiate Bennett.