Carla Mendelsohn
Dallas City Council Member, District 12
Early voting for Dallas Bond 2024 will take place next week, Monday, April 22, through April 30. Election Day is May 4.NumberThere are 10 proposals or topics, each of which can be voted on “for” or “against,” with each proposal having a total value of $1.25 billion.
I wrote an editorial that appeared in the April 14, 2024 issue. Dallas Morning News This explains why Dallas has for too long relied on debt to address basic maintenance and improvements to the city, and this must stop. These items need to be built into the annual budget. Because that has never been our management philosophy, for now we have no choice but to fund these much-needed items with debt. And that comes at a cost.
Since CandysDirt.com specializes in real estate, this article will focus on the city’s financial situation and the impact of increasing debt on property taxes as reasons for not supporting all bond proposals. Most CD readers understand that property tax increases affect everyone from homeowners who receive residential exemptions to rental property owners who do not receive exemptions and indirectly pass on increased costs to their tenants as annual rent increases. Commercial property owners are typically responsible for passing on all property taxes, insurance, and maintenance costs (triple net), resulting in higher consumer costs due to inflation.
What will Dallas’ bond costs be?
Bond elections allow voters to authorize the city to issue debt, repayable with interest, for capital projects. The total amount of each proposal is $1.25 billion — $1.25 billion — Sometimes it’s easier to understand how big a number is when all the zeros are visible.
Is that the total amount of the bond?
No, that’s just the principal.Like mortgages, they accrue interest. The bond principal and interest total is $1.76 billion. An additional $510 millionAnd if there’s concern that some projects will cost more than estimated, the city can subsidize an additional 25 percent of the cost per project. Without voter approval, Total Bonds Mean It could exceed $2 billion.
According to the city’s website, the city’s current total debt is $3.5 billion. That doesn’t include the Dallas Police and Fire Pension Fund’s $3.4 billion unfunded liability and the Employee Retirement Fund’s $1.2 billion unfunded liability.
That means the city’s debt before the bond issue is more than $8 billion.!
Will taxes increase?
The messaging to the public about the bond, and the promotional materials from the media consultants and political action committee formed to pass the bond, included the message that if all of the bond proposals passed, there would be no tax increases. It literally said, “No New Taxes.”
But is that true? No. In fact, the city’s website doesn’t say that.
The following text boxes are available for each proposition, each with a different letter and number.
The city bases the tax estimate for this disclosure on a $100,000 home, which housing authority officials have said publicly in meetings is no longer a realistic price in Dallas. Additionally, the city makes the assumption that the property qualifies for a home exemption. Can you imagine what the median value of a Dallas home is, according to city reports, worth over $395,000, or what the actual figures are for rental homes, apartments, and other commercial properties without the residential exemption? Unfortunately, the costs of these types of properties and scenarios are not calculated.
Is possible There will be no increase in tax rates because some bond debt replaces existing bonds that are expiring. It is also true that property tax rates would go down if some of the bond proposals were not passed. The bond debt service is part of the property tax rate and the rest is the general fund.
Starting this year, Dallas will cap tax increases on its general fund portion. But that is not the case for the debt repayment portion. Without approval for debt issuance, interest rates would have to be reduced.
Ultimately, your taxes will pay for these expenses, so is it worth going into debt to pay for all of this?
I recommend
Proposal “For:” A, B, F, J, “Against:” C, H (for City and Hall)
There are several proposals that I would like residents to vote “yes” on.
- Proposal A: Roads/Transport
- Proposal B: Parks
- Proposition F: Public Safety
- Proposal J: Information Technology
These items are necessary and putting them off could cost more in the future or even jeopardize the future of our city. Everyone seems to agree that roads need to be improved and outdated traffic signals replaced, parks need new playground structures that aren’t decades out of their useful life, soccer fields with level playing surface, recreation centers with lighting and security, and parks need to be developed in areas that don’t currently have parks.
The new police academy will teach officers the latest techniques, including reality-based and virtual training, in a cookie-cutter facility designed for this purpose.Following the hack and significant data loss, Dallas needs secure computer server storage to house complex and critical police and city data that will be included in the technology proposal.
The flooding and erosion (Prop. C) and housing (Prop. H) proposals are important, but I oppose them because they do not require city debt and can be funded in other ways. For example, flood and erosion control projects can be funded with revenue bonds and added to water bills (which are cheaper), and housing projects can get tax exemptions and loans in more than a dozen different ways through federal, state and county governments, as well as Dallas’ own programs.
Many of the other proposals not mentioned contain items I support, but could be absorbed into the General Fund (operating) budget if the City Council is serious about how tax dollars are being spent. There is no reason to have to borrow money and pay interest on many of these items. And our city needs to reevaluate our role in providing services that are already provided by other government agencies using your tax dollars. It’s duplication.
timing
The above describes the liabilities of two pension plans. The Dallas Police and Firefighters Pension Fund has until November to submit a financial plan to address its unfunded liabilities. The City Council has been meeting to consider ways to reduce the $3.4 billion unfunded liability and increase annual contributions, a difficult task because it would have a major impact on the annual budget.
It would be foolhardy to seek to issue additional debt without knowing how we will meet this important obligation. Some City Council members voted to postpone the bond election until November, when the pension funding plan is resolved, but our proposal did not pass. If circumstances change, the item could be brought back to the voters. All of the proposals that were rejected give the City flexibility until this outstanding issue is resolved.
Your Vote, Your Taxes, Your City
Some of the bond advocates don’t live in Dallas or work for organizations that would benefit financially from the bond funds. You should decide what additional debt you want to incur, because it is your property taxes that will pay off not only this bond, but all the other debt the city owes.
Regardless of how you vote in the upcoming election, I hope you will take a greater interest in how Dallas is governed and become a champion for making our city more efficient and better.
