Colorado Springs Mayor Yemi Mobolade delivered his annual budget proposal to city council Monday. The proposal anticipates an $11 million shortfall and an increase of $20 million in operating costs, for a total of $31 million in cuts.
The cuts will include previously announced furloughs, the closure of the Meadows Community Center, layoffs, changes in revenue streams, a pause on cost of living and performance based raises for city employees, and further cuts across departments. Some of these cuts, like the layoffs and closure of the Meadows Community Center, are already in process.
Cuts across departments will vary.
The city has to have a balanced budget; it can't run with a deficit. Revenue projections determine the size of the city's budget, then officials in the mayor's office and city hall decide what will make up that budget.
Sales tax, which makes up over half of the city's revenue, is expected to come in around $11 million less than the 2025 revenue predictions. Colorado Springs Mayor Yemi Mobolade said in a letter to residents released as part of the budget proposal that the slower economy has resulted in less sales tax revenue.
“The decline is due to economic softening and cautious consumer spending,” Mobolade said.
Property tax is also expected to come in below 2025 budget projections by around $2 million due to required Taxpayers Bill of Rights (TABOR) refunds and restrictions.
Other revenue streams are expected to increase by just under $1 million.
New projections for 2025 show city revenues will likely come in under original budget projections by $15 million. In June, officials asked departments to reduce costs by around 3 percent. Those cuts will stay in effect through 2026.
Charae McDaniel, head of the city's finance department, said the proposed 2026 budget is 1.4 percent larger than those revised 2025 revenue predictions.
“So we have two numbers for 2025, you have the original budget for 25, and now we have our current end of year forecast,” McDaniel said. “From what we expect in 2025, how we expect to end the year in 2025, that 2026 budget is a smidge higher than that,” McDaniel said.
Councilman Brian Risley said council is concerned about the viability of a 1.4 percent growth in revenues between this year and the next given the current economic conditions.
“If we're projecting a 1.4 percent increase over 2025 actual revenue, what's the likelihood of that playing out?” Risley said.
However he said that the budget is fairly conservative and measured. Still, he said the city council could be considering more cuts to the proposed budget.
“We'll certainly look at that and if we see some areas where there should be some additional cuts or some other things that we would recommend to create an even better buffer,” Risley said.
City council can to some extent propose changes to the budget. It also approves the plan before it becomes the city's official financial plan.
Mobolade said his proposal protects key services like public safety, infrastructure, and housing and homelessness programs.
“Many of these are decisions that have been made again to prioritize public safety and core issues like housing and homelessness,” Mobolade said at the budget presentation.
He also floated the idea of an extra sales tax for public safety.
“We've talked about a potential future of public safety sales tax increase initiatives. We don't know if we're there yet, but we do plan to meet and talk about it,” Mobolade said.
Risley, who owns a business downtown, emphasized continuing to robustly fund the newly created Clean and Safe program from Downtown Partnership for public safety and economic vitality.
“When you've got a lot of vibrancy and a lot of excitement and people feel like they could come? downtown and spend their dollars and do it in a safe way with their families, that's a huge driver economically for our community,” Risley said.
“That's a reason why the city council has really wanted to support that program to make sure that people are comfortable coming downtown and that small businesses feel like they're being taken care of in the downtown world."
Overall, Mobolade said while the city is facing cuts, Colorado Springs is faring better than most U.S. cities right now.
“Compared to many American cities, truly, Colorado Springs is okay,” Mobolade said. “The State of our economy is strong. Not saying we don't have our own share of challenges, but we're doing better than most cities”
