DENVER — Mayor Mike Johnston announced furloughs and a hiring freeze during a Thursday morning news conference, as the city faces a $250 million budget deficit.
This comes as the State of Colorado had to manage a more than $1 billion budget shortfall this year.
In 2025, Denver is experiencing a $50 million revenue gap due to revenue flattening and increasing costs, according to Johnston. Heading into 2026, the mayor is projecting a $202 million deficit to manage.
He puts part of the blame on declining sales tax revenue that he says was caused by economic uncertainty created by President Trump, even though trump has only been in office since mid-January.
"This is the fundamental dynamics of a country that is worried about the economic forecast and is stopping spending as a result," said Johnston.
He also blames Denver’s government spending that he says mostly occurred prior to him taking office.
"Structurally, over the last 12 years, we have grown the cost of government 8% more than we've grown the revenues," Johnston said. "That is unsustainable growth of government.”
To balance the budget, Johnston said the hiring freeze will last through at least Sept. 15, coinciding with the completion of the 2026 budget. City employees will also follow a tiered furlough system, beginning June 1.
"Our lowest paid employees will take two [days], all of our mayoral appointees, all of our senior Cabinet members and I will all take seven [days], which will be the largest number of furlough days for all city employees," Johnston said. "That tiered balance both helps us save $10 million and helps us protect those city employees that are struggling the most to pay their rent."
Watch the mayor's full press conference, in the video player below:
The City and County of Denver will limit discretionary spending, as well as reduce and restructure contracts to address the deficit.
City of Denver employees account for 70% of costs, according to Johnston. The city's workforce grew from 10,000 to now 15,000 people over the last 12 years. Therefore, the cost of the city's government grew 8% more than the city's revenue has, according to Johnston.
This brings up the question of whether the city will eliminate some positions altogether.
"We will have to put all solutions on the table. That means we'll have to look at reduction or elimination of programs," Johnston said. "We'll have to look at consolidation of departments, and yes, we will have to look at layoffs. We do not envision a scenario where it's possible to right size this budget without that impact on personnel."
The furloughs and hiring freeze are two of the primary strategies for the city driving a reduction in costs. The mayor also mentioned moving more government services online to lower costs.
The city is asking residents for feedback on the following questions:
- What are the ways you think we should right size the budget?
- What are the services that are most core to you?
- What are the things that you find to be not most core services to you?
- Importantly, what are the ways you'd like to see city services be faster or easier to navigate?
However, Johnston said the city also needs to drive an increase in revenue to get out of this hole.
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The challenge that the mayor's office faces is current consumer sentiment is twice as low as it was the day quarantine for the COVID-19 pandemic began in March of 2020. This is the third lowest the consumer sentiment has been in the last 75 years. You have to go back to the Great Recession and Black Monday in the 1980s to see this low of consumer confidence, Johnston said.
The same is true for business confidence, the mayor reported. It's the lowest it's been in the last 15 years.
"It's... hard in this city to raise two kids and not be able to pay your rent every month. It's hard to watch your retirement that you worked 40 years to build to evaporate by 20 or 30% when the stock market collapses. The truth is, it's hard when it costs 100 bucks to take your family to the movies," Johnston said.
The mayor's office plans to continue with investments in capital projects that he says will increase revenue for the city, such as the Denver National Women's Soccer League (NWSL) franchise building a stadium in the city. The mayor clarified that this investment does not come from the city's general fund. meaning the investment does not cut a city employee or program.
While the establishment of the Denver NWSL stadium is a $2.2 billion investment, Johnston projected it will create 1,100 jobs and a $0.5 billion in sales tax revenue.
"1987 right after Black Monday, probably seemed like a terrible time to drive a significant investment in the city," Johnston said. "Building the convention center.... turned out to be a massive driver for the city. 1991 coming out of an early recession.... turned out to be the exact right time to invest in Coors Field, which is a massive driver of revenue long term, maybe our most catalytic investment in the last 15 years. 2008 in the heart of the Great Recession was the launch of Union Station redevelopment."
He also said the city will continue to invest in fighting homelessness.
"Homelessness is absolutely an investment in the city's economic growth," said Johnston.
As for spending on undocumented immigrants, he said it has come down.
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