Dallas Area Rapid Transit Board Proposes Smaller Rebate to Member Cities
The Dallas Area Rapid Transit board is trying to convince its member cities to accept a smaller rebate of the sales taxes they pay to the agency. This comes as some cities are pushing for a 25% giveback. The board discussed options to address the requests from member cities on Tuesday, following the filing of twin bills with the Texas Legislature last month aimed at curbing DART funding.
The bills would implement key changes, including compelling the agency to create a general mobility fund that would make 25% of sales tax revenue contributed by member cities available for nontransit projects like street and sidewalk repairs. However, agency officials have said that a high rebate from tax revenues would have devastating effects on the agency, prompting sweeping service cuts and layoffs.
Proposed Solution
Instead of the 25% rebate, the board proposes a locally created mobility fund that would redirect 5% of the sales tax revenue to eligible cities. This proposal is an attempt to address the concerns of member cities that have pushed for the legislation. The 2026 allocation amount would be equal to 5% of the agency’s total 2024 sales tax collections, or just over $42 million.
A study by the firm EY last year showed that seven cities — Addison, Carrollton, Farmer’s Branch, Highland Park, Richardson, Plano, and University Park — contributed more to DART than they received in service cost allocations. These cities would be eligible to receive an amount of the 5% proportional to the difference under the proposal. Plano would receive over $27 million, far more than any other city.
Reaction from Member Cities
Plano, one of the strongest advocates for state legislative action, said the proposal doesn’t go far enough. The city stated that the proposal does not address the $65 million dollar inequity highlighted by a recent report detailing how the agency spends its money. Plano called the proposal a “2-year band aid” and said they are seeking a permanent fix.
The draft resolution to establish the program is the latest in a series of attempted negotiations since six of DART’s 13 member cities last year publicly supported cutting funding to the agency. Since its founding in 1983, DART has levied a 1-cent sales tax on participating cities.
Background
Member cities hoping to reduce their contributions to DART have cited poor service and a lack of financial transparency as a source of frustration for years. DART officials have recently held a series of meetings to hear city service requests, including adding circulator service, expanding on-demand ride share, and addressing service issues in particular areas. Those changes, if implemented, could cost the agency as much as $18 million in the first year.
The agency has made headways with some member cities since talks began. In a reversal of its vote last year supporting cutting funding to DART, the Rowlett City Council passed a resolution supporting full funding to the agency. Dallas, which has been DART’s largest and most vocal supporter, also signaled support for keeping the agency intact.
Next Steps
Board members said cities would need to agree before moving forward with the proposal, but if they did, the agency hopes to find ways to fund it while limiting impacts on its budget. Strategies could include securing funding from the Regional Transportation Council and working with local, regional, and state stakeholders to develop a revenue replacement plan.
Several board members said the proposal came too late to make a meaningful difference. Plano representative Paul Wageman said, “We should have been doing this half a year ago or more.” However, Wageman warned that change at the agency is necessary to maintain its current membership, saying, “If we keep it the way it is, this is not sustainable and you will lose some of these cities. That’s just the facts.”
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Conclusion
The Dallas Area Rapid Transit board’s proposal to create a locally created mobility fund is an attempt to address the concerns of member cities. However, the proposal has been met with skepticism by some cities, which feel that it does not go far enough. The agency’s future remains uncertain, and it is unclear whether the proposal will be enough to keep the agency intact.
Frequently Asked Questions
Here are some frequently asked questions about the Dallas Area Rapid Transit board’s proposal:
Q: What is the proposal? The proposal is to create a locally created mobility fund that would redirect 5% of the sales tax revenue to eligible cities.
Q: How much money would be allocated to the fund? The 2026 allocation amount would be equal to 5% of the agency’s total 2024 sales tax collections, or just over $42 million.
Q: Which cities would be eligible to receive funding from the mobility fund? Seven cities — Addison, Carrollton, Farmer’s Branch, Highland Park, Richardson, Plano, and University Park — would be eligible to receive an amount of the 5% proportional to the difference under the proposal.
Q: What is the next step in the process? The board will need to vote on the proposal, and cities would need to agree before moving forward. If the proposal is approved, the agency hopes to find ways to fund it while limiting impacts on its budget.
