The Denver city budget will grow only slightly in 2025, Denver Mayor Mike Johnston said Thursday as he unveiled a plan with the slowest projected growth rate in more than a decade, outside the pandemic.
Denver’s general fund budget would grow to $1.76 billion under his proposal, an increase of just $20 million over the $1.74 billion the city allocated this year. But the relatively conservative spending plan continues to prioritize Johnston’s homeless strategy, affordable housing and other signature initiatives.
The slight growth outlined by Johnston’s proposal, which he introduced at a news conference in the City and County Building, is largely the result of declining consumer spending in a city that is highly reliant on sales taxes to power its government. The city also is nearing the bottom of the well filled by the $308 million in American Rescue Plan Act funding it received to help it recover from the impact of COVID-19.
Next year will bring the slowest budget growth rate the city has seen in any year since 2011 with the exception of pandemic spending cuts, according to the mayor.
“Like every American city, Denver faces headwinds from an uncertain national economic environment and the end of one‐time federal ARPA funds,” Johnston wrote in a budget letter accompanying his proposal to the City Council. “That is why this budget balances investments for long‐term growth with a focus on efficiency and smart stewardship of our fiscal health.”
The budget letter highlights specific buckets of spending aimed at Johnston’s oft-repeated key priorities — namely making the city more affordable, safer and more culturally vibrant.
Highlights include $60 million aimed at creating or preserving 1,400 units of affordable housing next year while also investing in more housing vouchers. Another $57.5 million will be dedicated to All In Mile High, Johnston’s signature homelessness program. That initiative runs on a network of transitional housing in converted hotels and temporary micro-communities.
The mayor also plans to spend $11.9 million to grow the city’s public safety departments next year. That money is expected to net 168 new police recruits via three academy classes, along with 24 additional firefighters and 60 more sheriff’s deputies.
The allocation comes after Johnston earmarked $8.2 million to grow the police department by 167 officers this year.
On Thursday, he touted progress on safety, with crime rates falling in many categories.
“You see almost a 30% reduction so far this year in nonfatal shootings,” he said.
But outside of uniformed public safety officials, the city is largely balancing its budget by cutting off hiring next year. For the first time since 2012, Denver is not budgeting to add any new full-time positions.
With attrition, that would result in a reduction of about 200 positions and leave Denver with a headcount of 9,738 non-unformed workers next year.
“While this decrease is partly due to restructuring how some positions are funded, most of the decrease comes from un‐budgeting vacant positions,” Johnston wrote in the budget letter.
That decision is expected to generate $30 million in savings in a city that spends more than 65% of its general fund dollars on its workforce, according to Department of Finance officials.
The strategy of not filling vacancies mirrors how Johnston was able to soften the budget impact of the $90 million the city is spending on services for migrants this year. The city will spend just $12.5 million for what he calls newcomer support in 2025, according to Johnston’s letter.
He said in his remarks Thursday that his administration’s pivot in approach in the spring — to providing intensive services and housing to some migrants, while ending long shelter stays — would result in the return of $20 million of that $90 million in panned spending this year to the general fund.
Falling consumer spending and dampened consumer confidence are national trends that have big effects on cities like Denver. For 2025, 55% of the city’s general fund revenues are expected to come from sales taxes, while just 11% will come from property taxes, city finance officials said.
This is a developing story that will be updated.
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