The Dallas City Council recently voted 14-1 to increase taxes on taxpayers next year. Over the last decade, city tax collections increased by a whopping thirty eight percent, when measured on a per-resident basis. Despite the sharp increase, city politicians claim it simply isn’t enough.
In typical grow-government-for-any-reason fashion, officials are continuing the historic trend of knee-jerk tax hikes, which have hit low and fixed income taxpayers the hardest.
Only one council-member, Lee Kleinman (District-11), voted against next year’s tax increase. He emphasized the importance of opposing unnecessary tax hikes.
In addition to increasing property tax revenue, Kleinman noted a significant rise in sales tax revenue in recent years. He also stressed the need for Dallas to reduce its dependency on costly debt by gradually transitioning to a “pay as you go” city, an approach that would set aside excess tax revenue for large, one-time infrastructure needs.
We’ve previously exposed how politicians often increase taxes arbitrarily, rather than in response to rising costs or justifiable needs.
Common-sense observers may be shocked by Dallas’ tax-hiking history. According to city records, Dallas’ property tax collections over the last decade have grown nearly ten times faster than its population (43% vs 4%). Specifically, their population-adjusted property tax collections grew thirty-eight percent (from $387 to $532 per resident), between 2005 and 2014.
But rising property values don’t fully account for this revenue boom. Over the same period, the city also raised the tax rate by eleven percent, hitting taxpayers with a double tax-hike. Rising land values weren’t lucrative enough for city officials, as they chose to tax the appreciating land at a higher rate.
It’s worth noting that property tax rates are really two separate rates; one for city operations (M&O), and the other for the repayment of debt (I&S). Since 2010, the city’s I&S rate has been declining. Officials decided that a falling I&S rate could offset a dramatic increase in the M&O rate.
As a result, the city’s operating budget has increased 25% over the last three years alone, while the population rose only six percent.
If city politicians were fiscally responsible, they could have done one of two things. At the very least, they could have allowed rising property values to increase their annual budget by keeping their M&O rate the same, while lowering the overall tax rate as the I&S rate fell automatically.
A more prudent alternative would have been to reduce the M&O rate along with the I&S rate. This would have still grown the operating budget, maintaining existing spending levels, all while limiting the increase in harmful tax burdens.
They did neither.
Not only have Dallas residents paid dramatically more for local government over time, a hike in their “budget tax” or M&O rate has unnecessarily accelerated the increase. As the saying goes, more money for big government never seems to be enough. Residents deserve better.