Bennito L. Kelty
Audio By Carbonatix
Denver Mayor Mike Johnston revealed his $1.67 billion budget for next year and his plan to solve a looming $200 million deficit during a briefing on Monday, September 15.
“The challenge that we know most Americans are facing is the one we just spent four months working through,” Johnston said. “As a part of that, you have to make the hard decisions to live within your means. Today, we are submitting a balanced budget that solves a $200 million hole.”
Johnston is trying to balance a $200 million budget deficit, which he blames on a decline in sales tax revenue. He says that laying off 169 employees and eliminating 600 more saved the city $100 million, solving half of the deficit; an additional 71 positions were cut in independent agencies like the city auditor’s office after they were forced to cut their budgets as well. All the city departments were “cut to the bone” to save enough money to fill the rest of the gap, Johnston said.
“There is nothing left to cut in these departments,” he added. “If there are amendments to the budget to add cuts to the budget, those would directly cut these core services or require more layoffs.”
The kind of cuts that city departments had to make included canceling $10 million worth of tech contracts, upgrades and subscriptions; paying for fewer marijuana prevention ads like the “Be a Smart Ash” signs; shutting down building entrances to save on security; and switching away from fee-heavy credit-card payment systems, which Johnston said trimmed $8 million. All told, the city saved $118 million by cutting personnel and eliminating vacant positions and another $77 million with the new, cost-saving measures revealed in the 2026 proposed budget, according to Johnston.
“We started by focusing on things that were the lowest impact cuts,” Johnston said. “We started on services, on contracts, on programs. We made all those reductions first, and we kept going back to departments asking, ‘What more can you cut?'”
The city also had to eliminate $11 million worth of housing vouchers, but Johnston blamed that on reduced federal and state spending.
Johnston said that he’s protecting core services like police, fire and 911 response, picking up trash and compost, and maintaining operating hours at city facilities, including libraries, rec centers and permitting and licensing offices. City facilities did have to close for a mandated furlough day at the end of August and will close the day after Thanksgiving. While no police officers lost their jobs, Johnston said he did have to cancel a class of Fire Department recruits.
“We’ve protected core and customer service,” Johnston said. “We’ve maintained our hours at our rec centers and parks — that means we haven’t closed pools, we haven’t closed libraries.”
The city shrank its projected revenues for the year from $1.7 billion to $1.67 billion. With next year’s budget, Johnston said that the city will be able to avoid any more layoffs as long as revenue breaks even with city spending or surpasses projections.
“What we communicated to city employees today is we have budgeted for 0 percent growth in 2026,” Johnston said. “If all of our returns are 0 percent or better, we will have no need for furloughs or layoffs in 2026. It would only be if the economy entered full-blown recession.”
Denver City Council still has to approve the budget, which Johnston presented at today’s meeting. Hearings are scheduled from September 22 to 26, with final adoption in November.
Homelessness and Migrant Spending
Hoping to quash concerns from the public that he spent too much housing homeless residents and migrants, Johnston explained that the city has reduced spending on supporting both populations.
The city will save $11 million by closing a hotel shelter and one of its micro-communities: a group of small, shed-like housing units. Johnston said the city won’t need as many temporary housing units because it’s reducing the length people can stay at its shelters.
“Three years ago, I thought we were going to have to build seven or eight more tiny villages or acquire two or three more hotels,” Johnston said. “Instead, we need less capacity. What we’re doing is instead of allowing a twelve-month length-of-stay, we’re pushing them out at six months.”
The city will close the Comfort Inn hotel-turned-homeless shelter at 4685 Quebec Street and move its nearly 140 residents into permanent housing, Johnston said. It will also close Monroe Village, a micro-community that houses more than forty people. Johnston said the city has already pivoted its focus away from moving people off the street to using case management to a “housing command center” to get individuals into permanent housing like leased apartment units.
“When we first opened these hotels, the purpose was to meet the overflow needs of getting folks off the street and into transitional housing,” Johnston said. “As we’ve gotten better and more focused on case management, on our housing command center that’s accelerated housing exits, on our workforce training, that means we get people moved out of transitional housing faster.”
Colorado Village Collaborative, a nonprofit that opened Monroe Village, originally ran it on its own; since January, it’s been managing the site through a city contract. It was not one of three micro-communities built by the city during the House1000 plan, Johnston’s blitz to move 1,000 people off the streets. The city owns the property, though, and it will replace the micro-community with “permanent workforce housing,” Johnston said.
With the closures, the city will no longer be renting any sites to house homeless residents, Johnston said. During the last two years, however, it spent millions to buy properties, including $40 million on the Aspen at 4040 Quebec Street, where two people were murdered in a still-unsolved case from March 2024.
In addition to dealing with homelessness, Johnston had to handle an influx of 43,000 migrants, mostly from Venezuela. That flow has tapered, he said, and doesn’t require any more city spending. The city spent close to $40 million to respond to the migrant influx in 2023 and more than $40 million in 2024, his first full year in office. The city spent about $10 million last year, and doesn’t plan to spend anything on migrants in 2026.
Johnston insisted that spending on homelessness and migrants isn’t the reason for the deficit and cuts, but he blamed President Donald Trump for leaving Denver with less than expected in the city’s reserves after the federal government denied a $24 million reimbursement for the city’s migrant response. Money set aside in case of another influx will be used to replenish the city’s savings instead, Johnston added.
Renting Greenhouses, More Speeding Tickets, Other Revenue Ideas
The city is also looking for new ways to make money, Johnston said, then shared three plans for adding $5.7 million to the city’s annual revenue.
The Department of Parks & Recreation will start renting out greenhouses, increase the cost of adult sports leagues and lower 40 percent discounts for annual recreation center memberships to 30 percent discounts, Johnston announced. All three moves are expected to generate $1.4 million in annual revenue.
“We had a great Parks & Rec employee who identified that they get lots of requests from people who can’t find greenhouse space in the city,” Johnston explained. “We have available greenhouse space, so for the first time, we will rent greenhouse space.”
The Denver Fire Department will begin new inspection services for conveyances like escalators and elevators. Johnston said that businesses often pay a third party to look at conveyances before getting an official city inspection; this new city service will turn the Fire Department into “a one-stop shop” that can pre-inspect, recommend changes and give a final inspection and approval. Johnston said the service will generate $2.1 million in annual revenue.
Meanwhile, the Denver Police Department will increase its use of photo radar enforcement. This includes speed vans and photo traffic lights, which take pictures of a vehicle’s license plate if it’s speeding or running a red light and then mail its driver a ticket; fines range from $40 to $75. Johnston expects the increase in photo radar enforcement to bring in an additional $2.2 million a year as more drivers are fined. The increased ticketing will also help address traffic safety concerns, he added.
Downtown Spending
When asked how Johnston plans to solve the root cause of the deficit — a drop in sales tax revenue — he said the city needs to invest to stimulate the local economy and get more residents to spend money.
Johnston said that starts downtown with the help of the Downtown Development Authority, a voter-approved financing system that relies on bonds and increases to property taxes between Union Station and Civic Center Park. The city is “really aggressively” pursuing a plan to convert empty office space into apartments with the help of DDA funding.
“That means people can live downtown, they can afford to live there, and they can walk out the door each day and buy coffee or buy lunch or go to the movies,” Johnston said. “That drives revenue downtown.”
He also plugged his Vibrant Denver plan, an upcoming ballot measure that would raise $950 million through bonds to fund critical infrastructure improvements around the city. Johnston said that passing the bond plan would fund “public parks, that are really attractive to folks who want to live and play around them” and “streetscapes, like the Santa Fe [Drive] streetscape, where you’ll see all the First Friday art activation…people will want to stop in at a restaurant or an art gallery.”
He said the city will also benefit from “high-profile investments” like the Women’s Soccer Stadium, the Broncos move to Burnham Yard, and continued work around the National Western Stock Show and River Mile.
“Those are all places that will bring more retail activation, more commercial activation and more revenue,” Johnston said. “It’s a big downtown plan, it’s a big bond plan and it’s a special events plan that we want to push at the same time.”
