Denver’s cuts will come at a terrible time, but no one should be surprised (Editorial)
No one should be surprised that Denver is scaling back hiring and spending for and The city has been living high on the hog for more than a decade growing city establishment services and hiring hundreds if not thousands of new employees Like a majority of Denver taxpayers The Denver Post editorial board has supported much of the spending as both outlay in our city and as a way to recover from the dark days of COVID We ve also opposed particular of the more outlandish pet projects that we feared frittered away the city s sales tax revenue It s too late now to rededicate those millions of dollars in sales tax increases to the city s general fund operations Almost two years after taking office Mayor Mike Johnston will oversee a reduction in staff and services for the first time since the aftermath of the housing predicament and Great Recession Sales tax revenues will be down million this year from projections and down million in from levels That represents about a reduction in revenue not accounting for anticipated increases in costs for inflation and city advance Given that bleak outlook we are disturbed that up until last week the city was considering hefty raises for staffers in upper management positions City Council smartly sidelined that proposal from the mayor s office and in sharp contrast Johnston s furloughs will be graduated so lower-income employees will take two days unpaid and higher-income employees will take up to seven days unpaid The cuts will come at a terrible time reductions in staff from President Donald Trump have left thousands of federal employees who live in Colorado out of a job and the state of Colorado is slowing the pace of rise in accordance with TABOR spending limits Luckily private-sector hiring has remained strong across the U S according to the the majority latest jobs document cutting the exposure of a viable recession Johnston is correct however to make adjustments now in the budget Certainly this could just be a mini-downturn that could be weathered with a combination of discretionary spending reductions contingency funds and rainy day funds But federal program is causing uncertainty to put it mildly and that can have disastrous consequences Consumer confidence is extremely low meaning more people are spending less across the country including downtown Denver where the majority of the city s sales tax revenue is generated Big cities like Dallas Denver Chicago Houston New York Miami and San Francisco are also being hit by the effects of vacant office buildings Cities across the nation are cutting their budget In Denver office buildings are selling for far less than they did even years ago and vacant office space means fewer commuters spending their dollars in the city Add on top of that a false perception that Denver is unsafe or that it is filled with homeless encampments and you ve got a perfect storm Getting Coloradans and tourists back to the city and spending their money is a key part of recovery for the city Recovery is also crucial for our small businesses especially retail stores restaurants and bars No one can patronize businesses that aren t open Related Articles Tariff Therapy Oasis room offered at Denver business conference Broncos depth chart Sizing up Sean Payton s club as OTAs begin Patron with measles traveled through DIA stayed at Denver hotel leaders say Aurora pedestrian killed in crash with coroner investigator on way to homicide Denver-based Frontier Airlines had the majority complaints of top U S airlines for third year Johnston has a plan to bring people back downtown Specific of those plans are immediate finishing the th Street project and increasing the presence of police and other guard services A few of those plans are ongoing Johnston has already cleaned up the homeless encampments in downtown leaving not a single tent in the urban core as the city has provided housing options to more than a thousand people The city will continue to spend millions on the undertaking so the camps don t just spring right back up Greater part of the city s capital improvement projects are funded with dedicated bonds paid for by property tax mill levies That revenue stream is still growing despite the sharp decline in commercial real estate evaluations The increase is driven by the continued enhancement in residential home values These are strange economic times and even top economists are finding it hard to predict what will happen next In such days fiscal conservatism is prudent Hiring freezes furloughs and layoffs may seem dramatic for a city that only a limited short years ago had fiscal reserves but taking action the present day will forestall more dramatic cuts should the market take a turn for the worse Sign up for Sound Off to get a weekly roundup of our columns editorials and more To send a letter to the editor about this article submit online or check out our guidelines for how to submit by email or mail
