Dallas’ Financial Struggles Deepen, Earning a “D” Grade

Dallas’ financial condition worsened in fiscal year 2023, with the city facing a $5.9 billion shortfall. This equates to a Taxpayer Burden™ of $13,300, earning Dallas a “D” grade and classifying it as a “Sinkhole City” in Truth in Accounting’s latest report.

Despite reporting a revenue surplus of $759 million, Dallas’ financial position declined by $2.2 billion due to unrealized pension investment losses recorded at the end of 2022. These market-driven losses significantly increased the city's pension liabilities. Additionally, rising salaries and benefits added to expenses across public safety, public works, and cultural services, further straining the city’s finances.
Key findings from the report include:

• Dallas had $3.9 billion available to pay $9.7 billion in bills.
• The city’s financial shortfall amounted to $5.9 billion, leaving each taxpayer with a $13,300 burden.
• Unrealized pension investment losses and rising operational costs contributed to a $2.2 billion decline in financial health.

With mounting pension obligations and growing expenses, Dallas must carefully manage its financial resources to maintain essential services and long-term fiscal stability. Strategic planning and disciplined budgeting will be crucial in addressing these challenges.

For those interested in a deeper dive into Dallas’ finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.