Mayor Michael Hancock on Tuesday proposed a 2021 budget that cuts spending from virtually every city function and and would leave hundreds of government positions unfilled as his administration grapples with Denver's worst revenue drop since 1933.
The coronavirus pandemic sapped tourism and local business taxes this year, aiding the removal of about $221 million in expected revenue from Denver's coffers, finance officials said. They're planning for a budget gap of $190 million in 2021, though that slightly rosier projection depends on how the country rebounds from COVID-19.
"(Revenue) has been trending in a positive direction, but I think we remain concerned about the fall, the winter and into next year, and the ability for particularly our small businesses to remain open and to sustain themselves through this very difficult time period," said Brendan Hanlon, the city's chief financial officer. "Because although we have seen a lifting of the most severe public health restrictions, restrictions remain in place for a very good reason."
Hancock's $1.3 billion spending plan must be approved by Denver City Council, which starts budget hearings this week.
The current proposal leaves over 400 positions unfilled across the city. About half of those jobs were occupied by workers who recently opted to retire early with an incentive package. Others were vacant posts that won't be filled.
Hanlon said some city employees might just take on a heavier workload and that everyday Denverites may or may not feel the pinch. But those vacancies could also trickle down to longer waits at permitting counters, for example, or service reductions at rec centers, libraries and parks.
"The grass may just get a little longer than typical in our parks," Hancock said.
To further numb the pain, Denver would dip into its rainy day fund, continue to furlough city employees, contribute fewer general fund dollars to big capital projects, forego replacing vehicles in its fleet, curb spending on technological improvements, and recruit fewer police officers and firefighters. The city would also save money by decreasing the jail population, providing less overtime for cops and firefighters, and and performing lighter maintenance on its buildings, according to the budget proposal.
To raise revenue, the city would unleash additional property tax mills, which would add $14 to the median homeowner's tax bill, Hanlon said. Denver would also charge more for its online "convenience fee" (think parking ticket payments) and hike up the fee to research public court records.
While the 2021 spending plan is characterized mostly by cuts, it includes "strategic" expansions, Hanlon said. Hancock is requesting $27 million extra for employee pensions, housing, homelessness, social services, health, youth violence prevention and diversion programs to keep people out of the criminal justice system.
Cuts hit almost every city function, including the police department, the subject of public scrutiny as reformers call for change.
DPD would see a reduction of almost $6 million, or 2.4 percent, over 2020's funding, according to the proposal. Those cuts would come from unfilled positions, less overtime and fewer police recruits.
Hancock's proposal trims DPD's budget by 2.4 percent and offers more money for social services at a time when civil rights protesters are calling for exactly those things. But on Tuesday, the mayor mourned the potential for fewer police boots on the ground and insisted law enforcement cuts had nothing to do with public pressure.
"When we say we are cutting back training academies and we're going to train less individuals to join or police department, folks, we are setting back our ability to staff our police department, our ability to keep everyone safe in the city, by years," Hancock said. "So this is a budgetary decision that we are making in consideration of a system of developing law enforcement in our city, not in response to protests."
Wash your hands and wear a mask if you want us to emerge from this thing bruised but not broken, the mayor said.
COVID-19 crippled Denver, which relies on sales and tourism taxes for about half of its revenue. The city's unemployment rate sits at 8.8 percent, Hanlon said. Consumer spending is down about 15 percent locally -- more than seven times the national rate.
To put things into perspective, during the Great Recession, lodging taxes paid by hotels (and, now, AirBnbs) were down 18 percent. This year, they fell 66 percent.
And Hancock stressed that 2021 is anyone's guess.
"I wish 2021 looked better," Hancock said. "The reality is, 2021 is just as uncertain as the last six months have been because the pandemic is ongoing."
Hancock said emerging from this recession will rely largely on city dwellers following social distancing and other health orders.
Budget hearings in front of the city council begin Wednesday.
This article was updated to correct the dollar amount and the associated percentage being cut from the Denver Police Department.
