By Deborah Grigsby | Denver Gazette
Facing a shortfall of hundreds of millions of dollars, Denver Mayor Mike Johnston is expected to announce significant cuts to the city’s budget at a news conference this morning.
The city is facing a $50 million gap in this year’s budget, while the projected deficit is $200 million next year, according to sources, who shared information with The Denver Gazette.
The city blames an economic downturn, flat revenues and “growing government costs” as reasons for the deficit, according to sources.
To deal with the shortfall, Johnston is proposing furloughs and a hiring freeze, in addition to limiting discretionary spending and reducing and restructuring contracts.
The furloughs will save the city $10 million this year, according to city estimates.
Last week, Johnston reversed his decision to give a dozen of his executives pay raises totaling almost $500,000, most of which would have been absorbed by the city’s General Fund.
Earlier this month, city finance officials told members of the Denver City Council to “plan for flat revenue in 2026.”
While sales and revenue taxes accounted for more than half (56%) of the city’s general revenue fund in 2024, finance officials warned that, even with no spending expansion, the city’s “natural” spending growth is on track to outpace revenue.