Denver city council members call new budget projections "depressing," "concerning," "disheartening"

Denver's top finance administrators told city council members on Monday afternoon that the next several months will be "very very uncomfortable" and will feel like a recession with soft revenue projections, increasing uncertainty, and inflation likely to hit 4% to 4.5% by the end of the year.

City council member Kevin Flynn called the outlook "depressing." Council member Stacie Gilmore said the forecast from the city's Department of Finance was "disheartening."

At a meeting of the council's Budget and Policy Committee, Justin Sykes, budget director for the Department of Finance, said the city was facing "serious economic headwinds," with the city expecting essentially flat sales and use tax revenues in 2026. He suggested city leaders should keep the 2026 budget as flat as possible or less than the 2025 budget.

Lisa Martinez-Templeton, chief economist for the Denver Department of Finance, warned of a coming tariff shock weakening real disposable income, increasing inflation by the end of the year, and "supply chain stress."

She said that businesses will likely cut back on their investments and that laying off workers is a "known unknown."

The city has been significantly impacted by past spending on the influx of immigrants and Mayor Mike Johnston's programs to address homelessness.

"I want to hear less about the 2026 budget and where we're headed," Flynn said. "I want to know more about 2025 right now and where we're headed."

While Johnston has not revealed how he plans to address potential budget shortfalls, Flynn said there might be impacts to programs and services as the city has seen in the past.

"You might see hours cut back at rec centers, like we did," Flynn suggested. He said that the Parks and Recreation department recently told him that they would have flowers to plant in parks. "My question," Flynn said, "are we going to have people to plant them?"

Gilmore said it was "100% you're going to see cuts" in city services and programs. She said that currently, "in the Montbello community, there is nobody to go out and clean the graffiti up."

She said she feared the dour economic forecast would mean "less people to help you with your problems."

The mayor has to release his proposed 2026 budget by Sept. 15.