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Boulder staff warn of lower sales-tax revenue but say new arts fund remains on track
Summary
City finance staff told the Boulder Arts Commission on June 25 that a hiring freeze and a projected $8–10 million shortfall in sales-and-use tax revenue will constrain hiring and new spending across the city, but the newly created Arts, Culture and Heritage fund (2A) remains committed to the programs approved for 2025.
Boulder — City finance staff told the Boulder Arts Commission on June 25 that lower-than-expected sales-and-use tax projections have prompted a citywide hiring freeze and spending reductions, though commissioners were told the Arts, Culture and Heritage fund (referred to in the meeting as “2A”) is not expected to see immediate cuts to programs approved for 2025.
Elliot (Community Vitality staff, budget presenter) told commissioners the city issued a press release last week announcing a hiring freeze for most vacant positions through December 2025 while central finance identifies savings across departments. “We still feel very solid in what we’re doing and the programs that we’re standing up and trying to support this year,” Elliot said during the presentation, noting the arts fund’s approved 2025 allocations were one-time commitments and will be treated as potential enhancements for 2026 budget planning.
Commissioners were shown citywide revenue work that projects an $8 million to $10 million reduction in sales-and-use-tax receipts over the next couple of years. Elliot said the arts fund’s share of those declines will be smaller in absolute dollars because the fund’s portion of total city revenue is much smaller (discussed in the presentation as roughly $3.5 million of arts-specific funding compared with a much larger citywide tax base). He also described the staff approach to using available fund balance as a temporary buffer while avoiding long-term structural deficits.
City budget process and timeline were reviewed for the commission. Elliot said the department’s 2026 budget request is being finalized and technically due to central finance; consolidated material will be presented to senior staff and then to City Council (a late‑August presentation and study session were cited), with the formal public‑comment phase beginning at first reading in October. Elliot also explained the difference between “fund balance” and reserves: 2025 is the first year the dedicated arts fund exists, so there was no 2024 ending balance to carry forward; staff expect a modest ending fund balance in 2025 if all programmed dollars are not spent by Dec. 31.
Commissioners asked about how reserves and fund balances carry forward; Elliot summarized the mechanics: beginning balances equal the prior year’s ending balance plus prior reserves, and a government standard reserve of roughly 16.7% is used to measure fund health. He encouraged commissioners to review central finance’s presentation to Council and said staff will return with more detailed numbers in September.
Looking ahead, commissioners were told the department is continuing to work with the University of Colorado and central finance on near‑term economic projections and to refine spending plans for 2026 that balance program goals against revenue uncertainty.
