Dallas Area Rapid Transit, the region’s largest mass transit agency ferrying nearly 50 million passengers last year, could lose $6 billionin funding during the next two decadesif cities that pay the bulk of its budget get their wish.
Six of DART’s 13 member cities have passed resolutions since June in support of cutting sales tax contributions to the transit agency by a quarter. Another member city, Dallas, has openly discussed doing the same.
SinceDART was formed in1983, participating cities have paid a penny sales tax — a 1% tax on every dollar spent — to DART. Sales tax revenue represents about 70% of the transit agency’s overall budget. Other revenue sources include fares, federal funds, interest and debt issuances. Plano and Irving, two of DART’s biggest sources of sales tax revenue, would each save about $30 million annually by cutting contributions by a quarter.
DARTleadershave said that would cripple the agency, leading to deep service cuts throughout the region. Member cities, however, say they’ve waited years to get answers from DART about where their dollars are going — and are ready to take the fight over funding to the Texas Legislature to change the laws governing regional transit agencies.
DART’s system services about 700 square miles in Dallas-Fort Worth, operating 692 buses and one of the longest light rail systems in the country. The urban rail and bus network is the primary source of transportation for thousands of area residents traversing the sprawling metroplex. The usefulness and scope of that system is now in question by cities looking to claw back millions of dollars in contributions, which have grown to $870 million a year.
How DART was formed and funded
In August 1983, voters in 14 cities in Dallas-Fort Worth cast ballots in favor of forming a regional transportation authority that collected a one-cent sales tax from member cities. Seven suburban cities voted against the proposal.
That support led to the creation of DART. It was the second attempt to form a regional transit authority supported by a one-cent sales tax.
As early as 1988, according to The Dallas Morning News archives, some local officials and residents were expressing doubts about the newly-formed DART, complaining of poor system design, excessive costs and mismanaged funds.
It’s long been common for transportation agencies to be the subject of poor public opinion, according to Michael Walk, a researcher at the Texas A&M Transportation Institute.
“The norm for transit systems, particularly across the U.S., is to struggle with public perception, whether it’s the riders themselves being maybe dissatisfied with the way the routes work or with safety or cleanliness of systems or nonriders seeing public transit as a less desirable service,” Walk said. “So I think it’s an ongoing challenge to correct those perceptions or to mitigate the ramifications of them.”
The state’s Transportation Code gives transportation agency boards the authority to voluntarily ask the state comptroller to collect sales taxes at a lower rate than what the public authorized when DART was formed. If the DART Board of Directors does not do that on its own as member cities that have passed resolutions want, officials would be forced to ask the legislature to change the code to create another avenue to cut funding.
As cities demand answers, riders fear cuts
When Dallas resident Alexander Dunn heard Plano passed a resolution in June to cut their contributions to DART, he started organizing. On a Saturday afternoon in late July, Dunn and about 50 other DART riders and advocates gathered in a small community room in downtown Dallas to discuss how to respond.
“People are really keyed into the fact that this is an existential fight for the future of DART,” Dunn said.
Dunn’s group, Dallas Area Transit Alliance, says riders will ultimately pay the price for funding reductions. Although he’s a casual user of DART who owns a car, he knows many rely on the system as their sole source of transportation.
Although exactly what cuts would happen would be determined if funding reductions were finalized, they could include less frequent buses, cuts to paratransit service for disabled riders, workforce reductions and deferred maintenance.
“Many options from my personal perspective exist including consolidation of bus routes, increased schedule intervals for buses, light rail and commuter rail, as well as the reduction up to removal of GoLink service,” DART board member Randall Bryant said in a public statement. Bryant represents Dallas on the board.
The alliance launched an online petition objecting to the cuts that has collected more than 1,400 signatures as of August 6.
“All of the progress DART’s been making over the past year, more than a year, with regards to security, cleanliness, maintenance, reliability, frequency — all of that would go away if DART loses a quarter of its sales tax revenue,” Dunn said. “And even beyond that, we now have to be starting to work from the bottom trying to get back to that [current service levels] before we can even think about improvements.”
Officials say they empathize with riders and are advocating to make the system they rely on better.
“Plano is very pro-transit — I think that gets lost in some of the discussions and media surrounding the discussion,” said Plano director of government relations Andrew Fortune. “There’s been a lot of discussion around, ‘Oh, my goodness, this is going to harm riders or it’s going to cut services’ and that’s really not the proposal.
Rowlett Mayor Blake Margolis said he understands riders’ concerns and does not want to see service in his city reduced.
“We support transit,” Margolis said. “We want to see DART perform well, we want to see trains be clean and safe, and we want to see ridership go up. But we also know that just the way that the business is functioning today is not working in the best interest of DART member cities.
“And if we want to see this transit system grow regionally, then it’s something some kind to change with this structure.”
‘Rendering the entire system useless’
Leaders at the mass transit agency say reduced contributions would mean significant cuts to the frequency and number of critical routes.Service frequency could be cut back from 15 minutes to as much as one hour on some routes, and paratransit services for disabled residents would also be cut back to federally mandated minimums, DART CEO Nadine Lee said.
“When you’re getting to those levels of service on your best lines, best corridors, you’re really rendering the entire system useless,” Lee said.
The agency would also have to halt or delay maintenance and modernization projects. Those include efforts to upgrade original rail signal systems, infrastructure and vehicles and to modernize passenger amenities and facilities.
“Both the light rail fleet as well as the bus fleet is ending its useful life or reaching the end of its useful life,” Lee said.
“We know that we need to program a tremendous amount of money to modernize our system because it is aging and because it is becoming increasingly more expensive for us to maintain what we have because of the age of our assets. And so the spending that we’re doing is prudent.”
The agency hopes to expand services as the region contends with a growing population.
Growing contributions means more accountability
Several member cities that have publicly supported capping DART contributions have said they do not want service cuts and the recent resolutions were an attempt to getanswers fromthe agency. Top officials from three member cities said they have been asking DART for years to provide a detailed breakdown of what services the cities get for their dollars, along with local ridership numbers.
“We continue to look at how much revenue is increasing year over year, and still can’t get an accounting of what it costs to provide services in Plano, so that really became a driving aspect,” Plano city manager Mark Israelson said. “I think Plano has been very patient in waiting for some of those answers over these years, and we’re at that point of really wanting to know what that provides to our community.”
The agency provided a cost allocation report by city in 2022, DART chief financial officer Jamie Adelman said.
“There were three or four attempts that we made to try to allocate the cost by city in order to answer the question that we were hearing from the cities, and I will tell you that every time we turned something in to the cities for their review, they were not happy with it [but] they were not clear about what they weren’t happy with,” DART CEO Lee said.
Figuring out how to break down systemwide costs like light rail by city has remained a challenge, according to Lee.
DART has commissioned a study examining the return on investment for each city by Ernst & Young, results of which are expected in September.
Also expected in the fall is the Transit 2.0 report, a study commissioned by the North Central Texas Council of Governments to examine regional transportation needs, including DART funding, through 2050. Lee and North Central Texas Council of Governments Regional Transportation Council director Michael Morris have separately urged cities to wait for the results of the studies before taking action.
“The resolutions that the cities are taking are premature and the reason why they’re premature is we’ve already outlined the process to get their questions answered,” Morris said.
Among other top issues for member cities is service. Officials from cities voting to cut funding have said they regularly hear complaints from residents about poor system design, crime and unclean buses and trains. Meanwhile, the dollar amount of tax contributions by member cities to DART has grown for the past 10 years and is expected to increase about 4.5% in fiscal year 2025.
“What would have the most impact positively toward their ridership is to enhance their basic services, making sure their trains and busses are clean, making sure that there’s proper fare enforcement, making sure that people feel safe while riding public transportation, which has been a plague on the system and which my constituents tell me is the reason why they don’t feel safe riding the train anymore,” Rowlett’s Margolis said. “This is about saying, ‘Hey, wake up, let’s refocus back on the important things that DART needs to focus on and get right.’”
Not all member cities think DART is doing a bad job. Officials in Garland and Richardson have expressed support for DART in public meetings, though none have taken formal action in support of the agency.
DART said they have tried to engage with city leaders about how to meet the needs of each community, but often haven’t gotten clear answers on what those needs are. Some member cities haven’t engaged at all, staff said during a committee meeting earlier this month, though the agency keeps trying.
DART, cities face revenue pressures
Member cities have pointed to low ridership as a reason to cut funds. DART says ridership has recovered about 83% since the COVID-19 pandemic, ahead of the national average, though they did not specify what metrics they use for the figure. Online ridership data shows fiscal year-to-date ridership through June 2024 is at 41.4 million compared to 52.8 million in June 2019, about 22% lower than during the pre-pandemic measure. DART’s fiscal year runs October through September.
“We spend…this year the projections are $108 million — that’s more money than we spend on anything,” Irving mayor and DART board member Rick Stopfer said. “And what are our residents getting for it? Are they really getting the service that $100 million deserves?”
Board member Patrick Kennedy, who represents Dallas, said cities should be looking to increase density around stations to encourage ridership.
“Like 80% of where ridership comes from is the built environment and land use patterns,” Kennedy said. “We should be going pedal to the metal for the next 10 years doing that rather than trying to take away revenue.”
Like other organizations, transit agencies have been subject to inflationary pressuresthat have squeezed finances, according to transportation researcher Walk.
“In addition to just general inflation and labor costs increases, it’s been a very big challenge to keep the workforce and to then have to pay them what they need in order to stay in a very difficult job,” Walk said. “Just like the rest of the industry, and every person is experiencing, whether it’s parts or fuel, or supplies, professional services, everything has been going up recently, and so transit agencies feel those pressures, just like every other business and company.”
That’s not to say every transit agency is 100% efficient, Walk said. There are significantmaintenance and operational costs to running a large transit system that might be difficult to communicate in a direct service-for-dollars way that cities desire. Those cost pressures can get in the way of investing in service upgrades like frequency increases.
City leaders from Rowlett, Plano and Irving have complained the DART system is a magnet for crime and the service is losing money because residents with other options are choosing not to ride DART.
DART crime reports increased 18% for the second quarter of 2024 over the same time last year, but DART says that is because of increased efforts to be proactive in addressing issues. The agency has added more than 100 armed security officers to address crime and partnered with Parkland Health for homeless and mental health outreach.
Margolis has pointed to fare evasion as an area where DART could shore up funds. Fares generally make up a small percentage of overall revenue, and things like day passes and federally mandated discount fares for certain groups complicate the fare picture, Lee said.
The agency had 73 fare enforcement officers last year. Increasing enforcement through a wider deployment of officers would result in more costs than returns, according to Lee.
“I think there’s a perception that we’re missing out on a significant amount of fares, and I don’t think that that is accurate,” Lee said.
DART has said cutting funding would only introduce more issues into the system.
“That means now you don’t have money to do the repairs on a 40-year-old system that needs to be done to keep the system up to date, and you keep making the entire system worse and worse,” DART spokesperson Jeamy Molina said in July.
Looking to Austin for answers
Any reduction to the one-cent tax could potentially put DART in default with bondholders, staff told the board during a committee meeting earlier this month. About 25% of what DART spends every year is on debt service.
Member cities say they are dealing with their own budget constraints. Dallas has discussed whether to divert DART funds to deal with its pension crisis, though only the DART board or the Texas Legislature can trigger changes to DART’s funding structure. Officials have pointed to a 2019 state law that capped local government property tax increases at 3.5% without voter approval.
“We had that implemented, and we had to adjust very quickly,” Plano’s Israelson said. “We didn’t have an extended period to be able to do that. So we’ve learned to live with revenue caps. We think DART can, too.”
Israelson said the goal is to lower the city’s sales tax contribution to .75 cents per dollar. A revenue cap could also have incremental growth baked in to account for inflation.
“Right now, we would challenge the discussion that if they are fully funded at the dollar amount that they have this year and going forward they have a revenue cap that has some sort of increment of growth in it, I would challenge the question, tell us how that’s a service reduction versus the current service level,” Israelson said.
Plano and Irving send more than $100 million a year to DART.The $30 million or more that would be saved under their funding cut requests could provide relief to city budgets struggling to pay for other services.
Israelson said it would be up to Plano voters how those dollars are spent. In Irving, Stopfer said he would keep that money focused on getting residents where they need to go — though he isn’t sure what that might look like. Bus stops, sidewalks and streets all need attention in Irving’s DART service areas, he said.
“There’s a tremendous amount of dollars that need to be spent so that the individuals that are using these busses are in a clean, safe, accessible environment,” Stopfer said.
With the DART board not expected to offer a resolution to reduce funding, cities are weighing their options ahead of the next legislative session.
“If we really want to deal with these issues, it’s going to require legislation,” Stopfer said.
A proposal being considered by Plano officials would amend the Texas Transportation Code to restrict the issuance of future debt pledges to 3/4 a cent of tax revenue and “immediately” institute a revenue cap equivalent to DART’s sales tax projections for fiscal year 2024. An annual 2% growth index from sales tax revenue would be allowed for one-time expenditures, with any growth above 2% dedicated to paying off debt faster.
The proposal is a starting place for discussions and is the result of a consensus among member cities that passed resolutions supporting DART revenue caps, according to Plano’s Fortune.
Most of the items in Plano’s proposal can be accomplished by the DART board without legislative action, which Plano officials still hope for, Fortune said. But if DART doesn’t come to the table, officials will take the fight to Austin.
Plano will likely finalize its legislative program in October.
Stopfer said he would like to see legislative action to allow cities to join DART for less than a full penny, and to allow funds in excess of a capped amount to be returned to member cities.
“I think that there’s got to be a certain amount of transparency on how the dollars are spent, [and] I think that there’s got to be some correlation between ridership and dollars spent,” Stopfer said. “I think that if you’re truly going to bring other people on board, in addition to lowering the percentage, you’re going to have to change the makeup of the board because no one is going to come on a board that they can’t have a voice on.”
Board members are appointed based on a member city’s population, givingDallas eight representatives on the board. Other cities have at most two each.
Rowlett is also thinking about contingencies, according to Margolis, though he said it was too early to share specifics.
“Conversations are happening more and more between a coalition of member cities — we’re working on our next steps and formulating that and getting ready,” Margolis said.
DART is considering its own legislative priorities. The board recently postponed a vote to finalize a legislative agenda that included language opposing “legislation that could detrimentally impact DART’s mission, finances, governance or operations, including changes to DART’s sales tax statute.”
The board will revisit the issue in September.
DART wants to keep talks about how to move transit forward local, Lee said and continue discussions with member cities about how to meet the unique needs of each area through its area planning process.
“We have had conversations with each individual city about their vision for the future,” Lee said. “What they’re trying to accomplish in the future, where they see development patterns happening, where they see their major travel corridors where we can add that travel capacity for them. How we incorporate transit as more of an essential piece of the fabric of their cities.
“Those are the conversations I want to be having instead of trying to fight something down in Austin.”