Denver Mayor Mike Johnston unveiled his proposed 2027 budget Thursday after weeks of warning that the city is entering a tighter financial era despite stronger-than-expected revenue collections this year.

The projected general fund revenue for 2027 is $1.684 billion, the mayor’s office said. That’s about $17.5 million or 1.1% more than the $1.666 billion the city expects to collect this year.

The modest increase continues a sharp slowdown in the city’s revenue growth following the pandemic. General fund revenue grew 12.1% in 2021 and 9.3% in 2022 before slowing to 4.3% in 2023 and 2.3% in 2024. Revenue declined 0.1% in 2025 and is expected to grow just 0.2% this year, according to city data.

Among the highlights:

· Property tax revenue is expected to fall. The city projects $186.8 million in 2027, down $6.5 million, or 3.4%, from this year. Meanwhile, sales and use tax revenue is projected to rise $32.5 million, or 3.5%, to $970.7 million.

· Denver will spend nearly $10.9 million more under its new police collective bargaining agreement, which covers 2026 through 2028.

· The city expects to collect about $3 million more from parking. This includes $1.2 million from adding a third hour at some parking meters, $1 million from doubling the “No Parking” meter-bagging fee from $25 to $50 and nearly $883,000 from increased parking fine collections. Fine schedules remain unchanged.

Personnel costs represent the lion’s share of the proposed budget at 70%. Public safety — police, fire, sheriff and the Department of Safety — accounts for 37.2%.

Unlike last year, Johnston said, the proposed budget calls for no layoffs or furloughs.

The city eliminated 957 positions while balancing its 2026 budget, according to Laura Swartz, a Department of Finance spokesperson. About 80% of those were vacant positions. About 190 jobs, or 20%, were layoffs.

The proposed 2027 budget reduces the general fund workforce by just 10 full-time equivalent positions, primarily by eliminating time-limited jobs — positions created for grants or projects with set end dates, Swartz said.

The cuts follow years of growth in Denver’s workforce. General Fund staffing grew from 7,868 full-time equivalent positions in 2014 to a peak of 9,882 in 2023 and 2024, a 26% increase. After last year’s reductions, Johnston’s proposed 2027 budget would bring staffing to 8,281 positions — its lowest level since 2015, according to city data.

The decline in property tax revenue is driven partly by state property tax changes, falling commercial office values and slower residential growth, as high interest rates, insurance costs and property taxes weigh on affordability, according to the budget.

The city’s forecast also points to Denver’s labor market softening.

Revenue from the occupational privilege tax, paid by employees and employers, is projected to dip about $200,000 to $56 million, a roughly 0.35% decline. City officials said Denver’s labor force has been declining year over year since the second half of 2025, and they expect those declines to continue, though at a slower pace, in 2027.

Johnston’s proposed budget includes the roughly $32 million Xcel Energy franchise fee tied to an agreement voters will consider on the Nov. 3 ballot, Swartz said.

In a briefing last month, city officials told the City Council that Xcel’s franchise fee would not be included in the budget but that it would be added back in once voters approve the 3% charge on customers’ electric and natural gas service that is passed through to the city’s general fund.

This sparked debate in a recent committee meeting, with Councilmember Amanda Sawyer arguing that, if it is not included in the adopted budget, the council should determine how the “new money” is spent.

The proposed agreement keeps the fee at 3%. Xcel officials said a rejection by voters would not automatically eliminate the charge or payments to Denver when the current agreement expires Dec. 31.

With revenue essentially flat, is Denver’s budget crisis over?

Johnston stopped short of declaring victory.

“This year, we’re happy to not be in crisis, but we’re still going to be cautious about the ways in which we make investments,” Johnston said.

He argued the absence of layoffs and furloughs in his proposed budget, along with a 2% merit increase for city employees, represents progress after last year’s cuts.

But Johnston said the cuts aren’t being restored as revenue begins to improve. He described the cuts as “permanent structural changes” intended to restructure city departments around core services, rather than temporary reductions that could be reversed once the city’s finances improved.

“They weren’t one-time, let’s hold our belt in and see if we can get it back next year,” Johnston said.