(The Center Square) – Denver’s spending is growing faster than its revenue, according to a new report from the Common Sense Institute of Colorado.
It found the city will have a two-year budget deficit totaling $250 million.
The Center Square spoke with DJ Summers, the institute’s director of communications and research operations and one of the authors of the report, in an exclusive interview.
“The report hopefully cuts through the oftentimes crowded messaging around budgetary issues,” Summers said. “Simply put, the city of Denver grew to spend more than it has been making in revenue in the last decade.”
In the past decade, the report found that Denver’s real expenditures grew 51% per resident, while real revenue only grew 30%.
In August, the city laid off 169 employees as part of a larger effort to balance the 2026 budget. The layoffs represented 2% of the city’s workforce, while a total of 928 positions were eliminated from the city’s general fund through layoffs, transfers to different departments, a hiring freeze and the elimination of vacant positions.
Jon Ewing, a marketing and communications specialist for Denver, told The Center Square the city is acutely aware of the budgetary issues.
“This is something we’ve been talking about extensively. Frankly, the size of city government grew exponentially over the last decade while sales tax revenue has slowed. It’s now at 0%, or flat,” Ewing said. “It completely makes sense that the government would add employees during a period of rapid growth, but now that things have slowed, we have to take steps to responsibly balance the budget.”
Spending outpacing revenue has been an ongoing issue. Since 2015, Denver’s real spending rose at a 67% faster rate than revenues. This comes despite “rapid” population growth.
The issue has gotten even worse in more recent years, though. According to the report, even just from 2023 to 2024, taxable sales fell 2.5%.
Summers said that, while the issue is pretty straightforward, now is the time for the city to continue to take action.
“The best steps any organization can take to fiscal discipline is following the data — what costs, what works, what program results are,” he said.
Ewing said Denver is making the necessary changes.
“This is what we’ve been discussing and the reason we had to make cuts to right-size city government while also protecting core services and limiting layoffs,” he said. “We began the process of trimming spending back in 2024. The 2025 budget was the first one in over a decade (other than during COVID), to slow the growth of government and the proposed budget for 2026 actually cuts spending and puts money back into reserves.”
The report comes as Colorado faces broader economic headwinds, including a massive shortfall that led to Gov. Jared Polis to call the legislature back for a special session in late summer, as previously reported by The Center Square.
“The state of Colorado is also seeing budget shortage projections,” Summers said. “Economic indicators are saying the state isn’t quite the same economic hotspot that it was 10 years ago.”
