Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Budget Forecast topic
No spam. Unsubscribe anytime.
Boulder officials warn of flattening revenues, identify a $6.5 million 2027 general‑fund shortfall
Summary
City finance staff and CU economists told the City Council that sales and use taxes and property tax growth have flattened, contributing to identified shortfalls (a $7.5M shortfall for 2026 previously addressed and a $6.5M shortfall projected for 2027) and prompting department cuts, hiring freezes and a multi‑year funding strategy.
The Boulder City Council heard Wednesday that the city’s two largest non‑utility revenue sources—sales and use taxes and property tax—have flattened and will require continued fiscal adjustments as staff build the 2027 budget. Scott Carpenter, the city’s principal budget analyst, told the council staff has identified a $6,500,000 shortfall in the recommended 2027 General Fund and previously addressed a $7.5 million shortfall in 2026 through hiring freezes and targeted reductions.
“We are continuing to see a flattening of its major revenue sources,” Carpenter said, and added that staff are asking departments for 4% reductions as part of the 2027 budget development process.
Why it matters: Sales and use taxes (retail sales tax in particular) make up roughly 80% of the city’s sales‑and‑use revenue and have moved to much lower growth rates than in the previous decade. Property tax, which accounts for about 12–15% of city revenue and yields roughly 13¢ of each dollar of local property tax collected for the city, was revised downward for 2026 after appeals and weaker assessed values.
City staff and CU analysts presented several drivers behind the lower forecasts: modest national GDP growth, stalling employment growth (with Colorado showing job losses in the short term), elevated inflation driven in part by a recent gasoline price spike, and uncertainty tied to federal policy and the economics surrounding CU and nearby federal labs. Brian Ludendowski of CU summarized the national outlook and said the forecast model used a “most likely” (medium) scenario while also generating pessimistic and optimistic alternatives for stress testing.
To close the 2025 and 2026 gaps, the city implemented a hiring freeze in mid‑2025, asked departments for 5% operating savings and realigned programs and one‑time transfers. Staff said those steps produced limited service changes but that the 2027 budget will emphasize continued realignments, outcome‑based prioritization and the use of the city’s long‑term financial plan and SARE (sustainability, equity and resilience) framework.
City staff also noted a growing backlog of infrastructure and building maintenance needs. Scott Carpenter said the city revised sales‑and‑use and property‑tax projections downward by roughly $8.8 million across 2026–27 compared with earlier forecasts, creating pressure to identify revenue options or further reductions.
What’s next: Staff will integrate council guidance in coming weeks and publish the city manager’s recommended budget on Aug. 28. Council will review the recommended budget at a study session on Sept. 10 and consider first and second readings in October. Meanwhile staff will continue to refine forecasts and present polling and engagement results to inform any potential ballot measures aimed at addressing capital needs.
The council’s discussion emphasized transparency and clearer communication to residents about what programmatic reductions and realignments produced prior savings and what trade‑offs remain on the table.
