Aurora City Council discusses budget shortfalls and revenue strategies for 2026

Aurora City Council is grappling with significant budget challenges as it prepares for the 2026 fiscal year, following a spring workshop held on April 12, 2025. During the meeting, city officials discussed a projected shortfall of approximately $25 million in the general fund, primarily driven by declining sales tax revenues and increased operational costs.

City budget director Greg Hayes presented a detailed overview of the financial landscape, revealing that while the 2024 general fund ended with a net gain of $4 million, the outlook for 2025 is less optimistic. Sales tax collections are currently projected to fall short by $1.6 million, with the lodgers tax also significantly underperforming. Hayes emphasized the need for caution, noting that the city is not yet in a crisis but must prepare for potential revenue shortfalls.

The council is considering various strategies to address the budget gap, including potential cuts to city services and the exploration of new revenue sources. Hayes mentioned the possibility of increasing fees for services, particularly in areas like transportation maintenance, where the city incurs substantial ongoing costs. This approach aims to ensure that essential services can be maintained without over-relying on taxpayer funding.

In addition to discussing immediate budgetary concerns, council members highlighted the importance of long-term planning. The city has set aside a recession reserve of $25 million, which could be utilized strategically over the next few years to mitigate the impact of economic downturns. However, council members expressed the need for a balanced approach, advocating for both revenue generation and careful examination of existing expenditures to identify potential cuts.

The meeting underscored the complexities of managing city finances in a fluctuating economic environment, with council members acknowledging the challenges posed by inflation and changing consumer behavior. As the city navigates these financial hurdles, officials are committed to transparency and community engagement, ensuring that residents are informed about the implications of budget decisions.

Looking ahead, the council will continue to refine its budget strategy, weighing the need for fiscal responsibility against the necessity of maintaining vital city services. The discussions from this workshop will play a crucial role in shaping Aurora's financial future as the city prepares for the upcoming fiscal year.