8 August 27 - september 2, 2026 dallasobserver.com DALLAS OBSERVER Classified | MusiC | dish | Culture | unfair Park | Contents MONTH XX–MONTH XX, 2026 dallasobserver.com DALLAS OBSERVER | CLASSIFIED | MUSIC | DISH | MOVIES | CULTURE | NIGHT+DAY | FEATURE | SCHUTZE | UNFAIR PARK | CONTENTS | That’s gonna hurt After layoffs, furloughs, Dallas looks to cut employee healthcare. BY AUSTIN WOOD A fter employee medical costs drove a $51 million budget shortfall, the city of Dallas is preparing to tighten its belt in ways that could significantly alter employee health plans. On Wednesday, the Dallas City Council re- viewed a proposed change to how the city provides medical benefits to its employees. The proposal would eliminate the copay insur- ance plan, strip GLP-1 coverage for employees using the medication for weight loss and, as city manager Kimberly Bizor Tolbert reiterated time and again during the briefing, save the city money. Dallas is currently in the midst of a difficult budgetary season that officials have warned will lead to tough choices before the final draft goes into effect on Oct. 1. Property and sales tax reve- nues aren’t keeping pace with costs, and em- ployees have been asked to bear the brunt of many preliminary proposals as council members push back on cuts elsewhere. As reported by the Observer, the Dallas Public Library is eliminating over 70 positions as part of a reduction in force, and Tolbert’s proposed $5.65 billion budget calls for 100 to- tal layoffs and the elimination of 300 posi- tions. Cuts are expected at Emergency Management and Crisis Response, Office of Environmental Quality and Sustainability and Municipal Courts and Detention Services. Staff were also forced to take furlough days earlier this summer. With the budget’s impact already felt with a hiring freeze and a day of closed recreation cen- ters, employee healthcare has come under scru- tiny. That’s largely because, when the shortfall was announced, city officials cited a $13-17 mil- lion overrun in employee medical costs past ini- tial projections, partly driven by increased expenses tied to GLP-1 weight-loss drugs. The total overage is forecast at $17.69 million, ac- cording to the briefing, and the city’s contribu- tion for the current fiscal year is projected to total $146 million. Rising costs Human resources staff and representatives from the city’s insurance broker told council members that healthcare costs have grown across the board in recent years, mirroring wider national trends. The average employer healthcare cost grew 7.9% in 2026, the largest annual increase in more than a decade, accord- ing to the Milliman Medical Index, which also found that phar- macy costs are the fastest-growing cost component, rising 14.8% year over year on average. The city’s phar- macy expense is pro- jected to reach $54 million this year, up $14 million from the past fiscal year. Of that total, $8.8 million in costs are tied to employee purchases of GLP-1 drugs like Wegovy, which have been cited as a major driver of pharmacy costs nationwide. Staff told the council that stopgaps were put in place to curb use this year, but instead, demand grew. In April, the Dallas Morning News reported that the city’s costs associated with the drug have grown by 69% in the previous 12 months. | UNFAIR PARK | Photo by Nathan Hunsinger Changes due to budget cuts are afoot at Dalals City Hall. >> p9 CITY OFFICIALS CITED A $13- 17 MILLION OVERRUN IN EMPLOYEE MEDICAL COSTS. “I think families are just learning more about how critical it is to have an early start for their child, and that’s the message we continue to push,” Ramos said. “Because we know that there are students that we’re not tapping into, or they just don’t know about pre-K, or that they have options right down the street, and so we continue to make sure that parents are informed.” Growing pains While urban districts like Dallas ISD are grappling with a more immediate need to bolster enrollment, outer-ring suburban districts are also reevaluating their ap- proach. These districts have seen record growth in their student populations, mir- roring broader demographic shifts away from urban centers, with families seeking lower housing costs, better schools and a smaller-town feel. Located about 20 miles east of Dallas, Forney ISD has more than doubled its enrollment from roughly 9,000 students a decade ago to more than 20,000 today. It’s a fast-growth school district, but Superintendent Justin Terry said he hasn’t been immune to the pressures fac- ing other districts. Last year, enrollment was expected to grow by 1,000 students, down from a projected increase of 1,500. “I think whether it’s a declining en- rollment district or a district that’s really hit the peak and is beginning to fall,” Terry said. “We’re in the same boat.” The district has focused on innovation amid its rapid growth, but Terry said it has also been careful to monitor the changing ecosystem as more students en- rolled. Starting at the height of the growth surge, Forney ISD led focus groups with homeschool families to un- derstand why they weren’t choosing lo- cal public schools. More than any other factor, staff heard families wanted flexi- bility and options when choosing how to educate their children, Terry said. With their input in mind, the district began offering the Forney ISD Online Academy in 2022, following a 2019 pilot. The program allows students in grades 5-12 to complete coursework through an online curriculum while still accessing campus instruction, resources and extra- curricular activities like athletics. “It allows kids to have some flexibility for some of their core courses and come up and be a part of an athletic team, and still be a part of a Friday night football game, which is a great community event,” he said. “So I think that that’s something that we’ve got to begin to do, really, is just listen.” Between the hybrid enrollment pro- gram and online dual credit offerings, Terry estimated that 1,500 to 2,000 stu- dents participate at the high school level, accounting for roughly a quarter of upper secondary students. Other school dis- tricts, including Dallas ISD and Arlington ISD, have also begun offering similar en- rollment models. Growth at Forney ISD has also allowed the district to invest in innovative facili- ties, which are a selling point by them- selves. New property revenue has funded the completion of an animal science cen- ter, while Forney voters have approved $1.9 billion in bond funding since 2019 to build newer campuses equipped with cutting-edge amenities. The 2019 bond funded the construction of Opportunity Central, a $150 million blend of a career education facility and shopping mall with a florist, body shop, salon and dining op- tions, all staffed by students. Student ex- periences offered by the center, along with its openness to the community as a resource and event space, make it a tool to help change residents’ perceptions of public education, Terry said. “When you can create facilities that not only serve our kids but also serve our community outside of the hours, it adds value,” Terry said. “That really goes a long way, I think, when they see a school district in a light that is not just every day focused on eight to four, but really em- bracing the community as a whole and what the needs are there.” Hopefully, a payoff Last year, Richardson ISD’s enrollment fell by over 700 students. Branum’s expenses, such as transportation and food, keep ris- ing, and she said she’s not confident that state lawmakers will increase the basic al- lotment when they convene in January. But she’s still an optimist. RISD’s mar- keting campaign is launching over the next few weeks with a targeted enroll- ment push. The “One” is also an acronym: opportunities, neighborhood schools and experiences. Branum said those three things make the district unique and will remain central to its messaging. “We’re going to provide opportunities and choices if that’s what meets your family’s needs,” Branum said. “We’re go- ing to have amazing neighborhood schools, and then we’re going to provide experiences that I think are going to help shape our kids as humans. RISD plans to evaluate the cam- paign’s success in the spring, so it re- mains to be seen whether it will pay off. In the meantime, Branum said she knows what long-term success will look like when she sees it. “I hope… that there will be a moment in which their love and respect for the school district is so strong that word of mouth is just so infectious that before we’ve even reached out to a prospective parent, they’ve heard from 10 other par- ents,” she said. Reeling them in from p6
