Greeley City Council Addresses Budget Shortfalls Amidst Sales Tax Declines

The Greeley City Special Council Work Session on July 8, 2025, focused on the city's financial outlook, highlighting both challenges and opportunities in the upcoming budget cycles. Key discussions centered around the impact of high interest rates, sales tax collections, and the overall economic environment affecting Greeley's revenue streams.

City officials reported that elevated interest rates have resulted in increased earnings, contributing to a higher reserve fund. However, sales tax growth has been disappointing, with current collections rising only 0.2% compared to a budgeted expectation of 5.4%. This stagnation is concerning, especially as the city anticipates a potential decline of $1.8 million in sales and use taxes, which could escalate to a $17.1 million shortfall when factoring in building-related revenues.

The council noted that while online sales tax collections have been robust, accounting for a significant portion of the city's revenue, traditional sectors such as dining out have seen declines. The city expects that by the end of the year, over 15% of its sales tax revenue will come from online shopping, a trend projected to rise further in the coming years.

Building permit revenues are also under scrutiny, with current figures expected to match last year's performance but falling short of the 2025 budget projections. The oil and gas sector remains volatile, with anticipated severance tax revenues significantly lower than previous years, although some offset is expected from oil royalties.

Overall, the city anticipates collecting approximately $11.7 million less in available funds than initially projected for the 2025 budget. Despite this, there is a slight improvement from earlier estimates, and officials are optimistic about managing the budget through strategic use of stabilization funds and careful planning for the 2026 budget.

Council members expressed concerns about the broader economic trends affecting not just Greeley but similar communities across the state. They emphasized the importance of understanding these challenges in context, as many municipalities are grappling with similar revenue shortfalls.

As the city prepares for the upcoming budget cycles, officials remain focused on balancing the financial outlook while prioritizing essential services and projects. The discussions underscored the need for ongoing evaluation and adaptation to ensure Greeley's fiscal health in the face of economic uncertainties.