Colorado Springs is heading into 2026 with an $11 million drop in its general fund and $31 million less in the city budget, a sign of the economic uncertainty and constrictions facing the city.

Mayor Yemi Mobolade handed the hundreds of pages of his proposed 2026 budget details over to the Colorado Springs City Council in a Monday morning ceremony inside the City Hall rotunda.

The proposed budget reduces the General Fund to $427 million, the largest chunk of the city budget which pays for most of the city services that don’t have a dedicated fund. The current city budget for 2025 includes $438 million in the General Fund.

Mobolade said in the letter introducing the budget that his office focused on preserving funding for three areas through the cuts and limitations: public safety, infrastructure and the city’s response to homelessness.

“This budget makes prudent reductions in lower-priority areas, so we can
continue meeting our most important obligations without jeopardizing stability,” Mobolade wrote in the letter introducing the budget.

A limited city budget was the expectation after the city announced $31 million in savings and cuts in September to begin balancing out the likely budget shortfalls. The announced cuts included laying off 34 city employees, instituting five furlough days next year for most of the remaining city staff, delaying or reallocating $14.7 million in capital projects and closing the Meadows Park Community Center by Friday.

The budget overview largely places the blame for the drop on the continued slowing of the city’s sales tax revenue. The 2026 budget forecasts Colorado Springs’ sales tax revenue next year at $251.8 million, around $10 million below what the city budgeted for this year.

Mobolade’s letter also cited a roughly $2 million decline in the city’s property tax revenue because of the TABOR refunds the city issued this year.

The announcement Monday starts the official two-month process of finalizing the 2026 budget. The City Council is scheduled to have its first work session breaking down the budget Oct. 15. The public town hall on the proposed budget is set for 5:30 p.m. Oct. 27.