Dallas asked shoppers to “Spend it in Dallas.” The latest sales tax figures suggest they didn’t get the message.

Tax collections from retail spending are down 2% from last year, giving Dallas the weakest year-over-year sales tax performance among major North Texas cities and deepening its budget problems.

Sales tax revenues make up about a quarter of the city’s budget. 

City officials estimate sales tax collections will fall more than $6 million short of budgeted projections. It’s possible that spending during the FIFA World Cup will cover some of the shortfall. 

“What it says to me is that we don’t have people exchanging commerce in this city anymore,” council member Paula Blackmon said. 

The figures underscore unique economic pressures Dallas is facing even as it remains the largest economy in the region. Mayor Eric Johnson and other city leaders have repeatedly said the city is ceding shoppers and business to suburbs. 

The next fiscal year’s budget is already facing a $51 million deficit. 

The city has already taken drastic measures to confront budget problems through hiring freezes, travel restrictions and furloughing most city employees. Overall sales tax revenue has grown compared to last year but has fallen short of the city’s projections. 

Blackmon said the weakening sales tax growth – one of many economic indicators – might leave the city with no option but to cut staff. The concern is reflected in the city’s revised outlook.

Dallas officials overestimated sales tax revenue by $18 million for the next fiscal year, according to an economist hired by the city. 

The city launched a “Spend it in Dallas” campaign last November with Visit Dallas, the city’s tourism bureau, to encourage people to work, play and shop within city limits. 

But the campaign’s success has yet to be reflected in the latest sales tax collections. 

In March, Dallas collected 6% less in sales tax revenue compared with March 2025. Meanwhile, Fort Worth collected almost 14% more and Irving tallied a 36% year-over-year increase, according to the latest state figures.