Northglenn finance staff reports small revenue dips and flags state budget changes that could reduce local grants and tax shares

Deputy City Manager Jason Loveland told the Council on June 9 that through the first quarter of 2025 (collections through March) sales and use tax receipts were down roughly 1.4 percent and general fund revenue was down about 3 percent compared with the prior year.

Loveland’s report laid out line‑by‑line results for April and identified a series of state budget actions council should watch. The city’s finance staff is monitoring three potential changes that could affect Northglenn’s operating budget and grant opportunities: a $115 million state commitment over the next decade to build a digital trunk radio system that could reduce severance‑tax grant availability; a change to how the state returns a portion of its marijuana tax to local governments (state share reduction from the historical 10 percent of the state’s 15 percent to 3.5 percent); and several bills that could reduce collections flowing into the state highway user tax fund.

Why it matters: The city receives modest direct distributions from severance tax funds (Loveland said Northglenn’s direct distribution in 2024 was about $54,000). The marijuana tax share change is estimated in Loveland’s slides to reduce the city’s revenue from roughly $330,000 to about $115,000 annually if taxable sales remain flat. Highway user tax receipts add materially to the general fund (Loveland cited approximately $1.1 million in 2024) and influence road maintenance, snow removal and related services.

Details from the presentation: Loveland said auto use tax and sales tax had modest declines while the food tax increased 7 percent and marijuana tax collections were up 0.1 percent. General fund revenues were reported at about $10.2 million through April, down roughly 3 percent year over year. Personnel costs were driving expenditure increases across departments; total general fund expenditures were about 33 percent spent against budget at that point and up roughly 10 percent year over year, Loveland said.

Loveland also summarized activity across enterprise funds: water consumption was up about 2 percent through April, wastewater revenues and expenditures reflected increased personnel costs and fines for illegal discharges, stormwater included a system‑wide analysis budgeted at about $278,000, and the sanitation fund showed recycling commodity revenue down roughly 40 percent year over year.

On the state items, Loveland said the $115 million dedicated to a trunk radio system will create uncertainty about future severance‑tax grants administered by the Department of Local Affairs and could constrain other grant awards. He said the marijuana tax formula change — which reduces the state’s return percentage to cities — could lower Northglenn’s share from an estimated $330,000 to about $115,000 if taxable sales stay level. Finally, ongoing legislative work affecting the highway user tax fund made the potential impact uncertain; Loveland said staff expects more concrete numbers by August.

Council members asked clarifying questions about investments, fund balance and whether planned transfers that support the residential street program remain viable. Loveland pointed out that a 2026 sales tax extension related to water-supply funding should produce roughly $3.5 million of additional general-fund flexibility and provide a cushion for some of the legislative uncertainty.

Next steps: Staff will continue monitoring state legislation and report back when more concrete revenue estimates are available, including an August update anticipated to provide further guidance on highway user tax impacts.