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Northglenn budget update: sales tax down slightly; state changes could cut marijuana and highway funds
Summary
Deputy City Manager Jason Loveland told council April collections show small sales‑tax declines and highlighted several state actions that could reduce grant and tax revenues going forward, including changes to severance‑tax grant priorities, a reduction of state marijuana tax sharing, and potential hits to highway user funds.
Deputy City Manager Jason Loveland presented the city’s April 2025 financial update and flagged several pending state actions that could reduce near‑term revenues.
Loveland told the council that sales and use tax collections through March were down about 1.4% and that total general‑fund revenue through April was down roughly 3% from the prior year. "Sales and use tax is down 1.4%," he said. He also noted small sector changes: auto use tax was down about 2.2%, sales tax down 1.8%, food tax up 7%, and marijuana tax was up 0.1% for the month.
Why it matters: Loveland said three state developments merit attention. First, a decision to invest $115 million over the next decade in a digital trunk radio system could reduce the pool of severance‑tax dollars available for local grants. The city's 2024 severance distribution to the general fund was about $54,000.
Second, Senate Bill 25,268 changed how the state's share of marijuana tax is allocated. Loveland said the city currently receives an estimated $330,000 from the state share (the state collected 15% and returned 10% of that to local jurisdictions). The revised state share would reduce the city’s portion to about $115,000, a decrease in the low hundreds of thousands of dollars annually if taxable sales remain flat.
Third, several legislative changes affecting the highway user tax fund may reduce the state dollars the city receives for street maintenance. Loveland said the city received $1.1 million from that fund in 2024 and described the program as an important source for pothole repairs, snow removal and striping. He called the potential impact "the most uncertain item" and said the city would get clearer projections in August.
Council context and questions: Council members asked whether those reductions would force deeper use of fund balance in 2026. Loveland noted that an existing half‑percent sales‑tax extension restricted to water supply will end in 2026 and that the expiration will free roughly $3.5 million for the general fund, providing a buffer while the city completes next year’s budget.
Next steps: Staff will monitor state actions and provide updated revenue estimates. Loveland said final numbers on highway user tax impacts should be available later in the summer and that staff will incorporate any changes into the 2026 budget process.
