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Dallas OKs $200,000 contract to expand free tax-prep services after heated council debate on funding source
Summary
The City Council approved a $200,000 contract (with a $200,000 renewal option) to fund citywide free tax-preparation services for low- and moderate-income residents; council debated whether the program should be sustainably funded by banks, philanthropy or the general fund once ARPA dollars expire.
The City Council on Feb. 26 approved a one-year contract with Foundation Communities Inc. to operate a citywide Volunteer Income Tax Assistance (VITA) program, allocating $200,000 this fiscal year with a city option to renew for another $200,000. Councilmembers said the item will be funded with American Rescue Plan Act (ARPA) redevelopment dollars this year.
Jessica Galsha, director of the Office of Community Care and Empowerment, described the program as free, IRS-certified volunteer tax-preparation that targets low- and moderate-income filers and prioritizes claiming refundable credits such as the Earned Income Tax Credit and the Child Tax Credit. Galsha said the program served about 11,000 returns in 2024, delivering more than $10 million in refunds to participants and saving residents more than $4 million in paid-preparer fees.
Council debate focused on long-term funding and accountability. Several council members — including Chad West and Kathy Stewart — urged continued city support because the program returns significant dollars to low-income residents and can help prevent predatory refund-advance products. Others, notably Councilmember Ridley and Councilmember Mendelson, pressed for a sustainable plan beyond ARPA, pointing to Community Reinvestment Act (CRA) obligations by banks and other philanthropic sources that could help underwrite the program going forward.
Staff said Foundation Communities will deliver services through a network of trained, IRS-certified volunteers and paid staff who recruit and train volunteers, manage sites and provide outreach. Foundation Communities and partners reported the program leverages a relatively small city investment to coordinate hundreds of volunteers who deliver thousands of tax returns.
The council also pressed for contract accountability: staff said the contract is cost-based and will be monitored against performance targets (returns filed, outreach, site operations). Council members asked staff to continue exploring partnerships with banks, foundations and the city’s Financial Empowerment Centers to reduce future general-fund exposure when ARPA funds expire.
Why it matters: The VITA program returns refundable tax credits directly to working households that depend on those funds for debt relief, bills and basic needs; council members framed the award as both direct relief for residents and an economic multiplier that can anchor other local services.
