Headline: Texas AG Sues Dallas Over Proposition U, Saying City Understated “Excess” Revenue
Lead: The Texas attorney general has sued the City of Dallas, arguing officials miscalculated funds tied to Proposition U — a voter-approved measure that directs half of new annual revenue to police and fire pensions and sets a 4,000-officer staffing floor. The complaint names City Manager Kimberly Bizor Tolbert and CFO Jack Ireland Jr., and asks a court to force the city to reclassify and redirect millions to pensions, pay and hiring.
What the lawsuit says
– The attorney general’s filing says Dallas understated “excess” or incremental revenue available under Proposition U. State lawyers put the disputed figure at roughly $220 million for the most recent fiscal accounting, while the city’s records show about $61 million.
– The complaint also alleges the city skipped required procedural steps, including the mandated independent compensation survey for police officers — a study Proposition U specifies to help guide pay and recruitment decisions.
– The state frames the suit as enforcement of voter intent, not an attempt to write new policy.
The evidence the state points to
– The AG’s team cites internal budget spreadsheets, revenue ledgers, council resolutions and actuarial reports. Their experts flag particular revenue lines and accounting classifications the state says were excluded from the city’s surplus calculation.
– The filings rely on headcount reports showing Dallas had fewer than 4,000 sworn officers in 2026 — about 900 below the ordinance’s floor — and on communications between finance staff and the police department about hiring and recruitment.
– The complaint names specific municipal accounting entries that, if reclassified, would increase the pool of money Proposition U directs to pensions and public-safety pay.
How the dispute unfolded
– Voters approved Proposition U, the city codified it, and finance staff began preparing guidance on which receipts count as “new annual revenue.”
– The city produced revenue estimates and a compensation study; the state later challenged both the substance of the calculations and the study’s procedural compliance.
– According to the state’s timeline, exchanges of letters and requests for clarification preceded the lawsuit. When the AG’s office concluded those steps were insufficient, it filed formal legal action.
Who’s involved
– Plaintiff: Texas Attorney General Ken Paxton and his enforcement team.
– Defendants named in the complaint: City Manager Kimberly Bizor Tolbert and Chief Financial Officer Jack Ireland Jr.
– Other stakeholders: police and fire pension administrators, union representatives, outside auditors and consultants, council members and advocacy groups that backed Proposition U. Pension trustees and public-safety unions are closely watching potential funding outcomes.
Why it matters — the stakes
– If the court sides with the state, Dallas could be ordered to reallocate tens of millions of dollars to police and fire pensions, increase officer compensation and accelerate hiring to meet the 4,000-officer minimum.
– Such reallocations could squeeze other city programs and alter near-term budgeting, capital plans and service delivery.
– Beyond Dallas, the ruling could set a precedent for how courts interpret and enforce ballot measures that prescribe specific budget formulas and require procedural safeguards like independent studies.
Key legal and technical flashpoints
– How “new annual revenue” is defined and which receipts qualify for the Proposition U calculation.
– Whether the city’s accounting choices and the timing of classifications complied with the ordinance and with accepted municipal accounting practices.
– Whether the compensation study met the proposition’s procedural requirements (the state argues it did not).
What’s likely to happen next
– The case will move through state-court procedures: motions, discovery and evidentiary hearings. Expect both sides to seek expert accounting testimony and to exchange detailed financial records.
– Possible outcomes range from dismissal or a negotiated settlement to an order compelling reclassification and directed reallocations, plus prospective remedies such as revised audits or further disclosures.
– Either party could appeal, which would extend the dispute and potentially produce statewide guidance about enforcing voter-directed fiscal rules. The court’s eventual ruling will decide not only whether Dallas must move money into pensions and public-safety pay now, but also how strictly voter-approved budget formulas must be applied in cities across Texas.