DALLAS, Texas — The city of Dallas is reporting a $5 million shortfall in sales tax revenue for the first four months of the 2026 fiscal year, according to a budget briefing presented to City Council this week.
Chief Financial Officer Jack Ireland explained that high inflation, elevated energy costs, and a soft labor market have dampened consumer spending, which directly affects sales tax collections. The city had projected 4.6% growth in sales tax revenue for 2026 but has now revised that forecast down to 3.3%.
Sales tax accounts for roughly 24% of Dallas’ total revenue, complementing property tax collections. Ireland noted that slow sales tax growth is not unique to Dallas, as other Texas cities are seeing similar trends this year.
As the city prepares for the 2027 budget, council members are gathering resident input through town halls and district-specific budget polls, with responses due by April 17.
Council Member Gay Donnell Willis highlighted that roughly one-third of Dallas employees live outside the city, meaning their wages benefit other municipalities. She stressed the importance of affordable housing within Dallas, noting that Texas law prohibits mandating municipal employees to reside in the city, unlike cities such as New York, Boston, Chicago, and Philadelphia.
