Denver’s proposed 2021 budget reflects a hard-hit economy that isn’t expected to bounce back to pre-pandemic levels until 2022 — at the earliest — even after a coronavirus vaccine may be already on the market.
In an attempt to avoid layoffs, Mayor Michael Hancock intends to keep positions unfilled and institute more furlough days to help close its $190 million budget gap, according to the nearly 800-page document he released Tuesday.
"I wish 2021 looked better," the mayor said in a press conference. "The reality is 2021 looks as uncertain as the last six months have been, because of the pandemic that is ongoing."
The Denver Police Department faces a budget cut of about $25 million, which would largely come from fewer recruits, unfilled positions and less overtime. The mayor said the reductions are "not in response to protests," which have called for the defunding of the police in their cries for racial justice.
Hancock emphasized how "tough" budget decisions have been, as his administration grapples with the worst revenue downturn since 1933. Still, he said, this budget "clearly shows our priority of supporting those who need it most, continuing to respond to the coronavirus pandemic, protecting our public health, keeping people safe and getting people back to work by rebuilding our local economy.”
Guiding the decisions are the losses already felt this year: a $220 million shortfall on what was expected to be about a $1.5 billion budget.
To help keep the city afloat, Denver officials are proposing a savings plan of $154 million, which would include:
• $39 million due to reduced hiring and holding more than 400 career service positions vacant;
• $14.5 million reduced General Fund support for the capital improvement program;
• $12 million generated by citywide furlough days, which will be based on income;
• $9.6 million reduction in fleet replacement;
• $7 million through vacancies in sworn staff in police and fire due to smaller recruitment classes;
• $7 million in technology equipment, project and licensing savings;
• $4.5 million from vacancies in the Sheriff Department;
• $3.2 million due to forecasted lower jail population continuing into 2021;
• $3.9 million of utility and facility maintenance savings; and
• $2.3 million in reduced uniform overtime spending in safety agencies.
Denver plans to raise its revenue by adding property tax mills that are estimated to increase the median homeowner's tax bill by $14. The city also intends to up its online "convenience fees" for certain transactions, such as parking ticket payments, and increase the price to access public court records.
The city will continue to make some investments, however, including devoting $1.4 million to sustain mobile COVID-19 testing capability and $2.9 million toward public health inspectors to make sure businesses are complying with public health guidelines.
Denver will also accelerate the Elevate Denver bond program, where resources have already been secured and are stable, by launching another $170 million in bond funded projects.
“Returns on capital investments are double: every $1 million spent generates $2 million in economic output and Elevate Denver is double the size of the city’s last General Obligation bond program, Better Denver Bonds, which the city used to support recovery from the Great Recession,” Hancock stated.
The 2021 budget is also investing about $260 million toward support and services for people experiencing homelessness, including $5 million to operate a new homeless shelter off 48th Avenue.
To help keep neighborhoods safe, the city also plans to allocate about $78 million for youth programs, including $516,000 toward funding community-driven youth development programs, plus another $250,000 to help prevent youth violence.
"No one, especially children, should feel unsafe in their neighborhood," Hancock said, remarking on the recent rise in youth violence.
The budget also funnels $11.5 million into addressing behavioral health and criminal justice issues, including matched funding from Caring for Denver to fund the Denver Police Department’s co-responder program and the city’s Support Team Assistance Response program, which deploys mental health professionals and a paramedic instead of an armed police officer to low-level 911 calls.
"This budget does not support a false choice between safety and transforming our criminal justice system," Hancock said. "It does both."
The city is also maintaining its General Fund reserves at 12%, or $163 million to help weather any unforeseen economic changes in the future, according to Brendan Hanlon, the city's chief financial officer.
Although revenue is expected to slowly begin recovering in 2021, the extent to which that occurs is largely dependent upon the wide availability of a vaccine for COVID-19 and "how well confidence in public health is restored among consumers, businesses, and tourists," Hancock said, adding that his budget reflects “the sense of the city at the end of a tumultuous 2020 and start of a new year: cautious optimism for a sustainable and equitable recovery.”
The current budget, however, is based on an optimistic pandemic outlook, Hanlon said, but if there were to be a resurgence of the coronavirus in the latter part of 2020 and 2021, "we would have to come back and further revise these numbers."
City Council committees will begin budget hearings this week, with final adoption of the budget in November. The mayor’s 2021 budget proposal can be found online.
Joey Bunch contributed to this report.