KERA Reporter BJ Austin files this report from today’s city budget briefing:

They’re talking red ink again at Dallas City Hall.

The first budget update for 2014 shows a $37 million shortfall. But that’s not as bad as previous years.

Property and sales tax revenues are up after taking a big hit during the recession. In the past few years the shortfalls have been upward of $100 million. The additional tax revenue estimates have council members making priority lists of how to spend the money.

“My strongest priorities are support for restoring street funding, library hours and arts funding,” Councilmember Ann Margolin said.

But Councilman Jerry Allen warns against a spending spree.

“Let’s continue to be innovative and come up with some extra money, or just think about how we do this culture, arts and recreation,” he said.

Mayor Mike Rawlings says arts organizations need to have their books in order if they want to get city money.

“You know I love the arts,” he said. “I am the biggest proponent of the arts. But I have a real issue of giving money to arts organizations that you cannot understand their balance sheet.”

And Councilman Dwaine Caraway wants to make sure city arts funding benefits small South Dallas arts groups as well as the bigger venues in downtown and North Dallas.

Council members will flesh out their wish lists for a second budget briefing in June.