AURORA | Aurora is preparing to confront a looming budget imbalance in 2026, predicting a more than $25 million shortfall between the general and capital projects funds.
“I’ve actually talked to a couple of people about this, and I got called Dr. Doom,” Greg Hays, city budget manager, said Saturday at a special budget workshop for city lawmakers.
Hays has been spreading the gloomy news for weeks now, explaining how sales-tax revenues have fallen below projections for several months.
Hays said Saturday that an updated analysis of the 2026 forecast showed the situation is more severe than he initially predicted. The originally estimated $11.5 million shortfall last year more than doubled to $25 million, including additional annual shortfalls of millions in the city’s capital project fund.
The Business Research Division of the Leeds School of Business at the University of Colorado Boulder helped the city develop revenue estimates for the budget process, according to the City of Aurora.
Declining sales tax revenues and economic softening contribute to an unbalanced 2026 budget, Hays said. The 2026 target was not immediately available, but the city adopted a $1.4 billion budget across all funds for 2025.
Sales tax collections, Aurora’s largest single source of operating revenue, are currently $1.6 million below projections. January’s revenue showed a 2% drop compared to the same month in previous years, and lodging tax revenue has plummeted 20% since mid-2024.
The capital projects fund also faces ongoing future shortfalls, with an estimated $7 million from 2024, $8.6 million in 2025 and $9.4 million in 2026.
“We’re a little short of budget at the moment,” Hays said. “It’s way too early to sound alarms, but these trends are something we need to pay close attention to.”
Hays listed potential “top-down and bottom-up” cuts and changes, such as employee pay, insurance assumptions and even furloughs as other solutions.
City Manager Jason Batchelor and Hays presented a combination of strategies that city council members could use to balance the budget, including tapping into Aurora’s recession reserve, pulling from other funds and reserves, make cuts, increasing city fees and postponing, enact furloughs or layoffs or cancelling planned construction projects.
“We don’t have to hit the panic button,” Batchelor said. “Everyone talks about the rainy day fund, and you all did it when the sun was shining, and now the clouds are gathering.”
Some of the shortfall answers proposed include:
- Using reserves: Batchelor said the city would look at a multi-year drawdown plan, potentially using $12 million from the recession reserve in 2026 and $4 million in 2027.
- Increasing fees: Proposals include introducing a transportation maintenance fee and possibly raising the 911 emergency fee from $1.79 to a maximum of $2.12.
- Capital project delays: The city may pause some infrastructure and parks projects.
- Cut spending: Top-down and bottom-up approaches would be considered, where executive directors can look at big picture cuts and departments can make suggestions they notice. The “top-down” cuts could have long-term implications, whereas “bottom-up” cuts would be more granular or targeted.
- Transferring funds: The city is evaluating the potential to move dollars from the Conservation Trust Fund and Parks Development Fund, the Green Fund, to help balance the general fund.
“Employee pay, insurance assumptions, furloughs, everything is on the table,” Hays said.
Hays and Batchelor said they are optimistic about the five-year look at the budgets. Hays predicted that Aurora is expected to follow a “V-shaped” recovery, with economic performance and revenues bouncing back in 2027.
The Leeds model Hays worked with provided optimistic, baseline and pessimistic possibilities. Aurora typically relies on the baseline forecast while preparing strategies for the other two, Hays said.
“Colorado has been so hot recently, and it’s hard to grow on growth,” Hays said. “Other states are catching up. We’re adjusting expectations, but still planning ahead.”
The city’s reserves are currently well-funded, which will help with the 2026 shortfall, Bachelor said. Aurora maintains 3% or $12 million in operating reserves and 10% or $40 million in policy reserves.
Currently, Hays and other city staff say the shortfall would be relatively short-lived, not representing a new economic bottom or an extended recession. But confusing and dynamic changes from the Trump White House, including shifting tariffs, make the near and far future hard to predict.
“The White House, with this tariff policy,” Mayor Mike Coffman said, “there’s a risk. It could turn out great. It could turn out really bad, but there’s a big downside risk.”
The city’s efforts to balance the budget sparked tension among city council members. Recent debates have revolved around the controversial repeal of the Occupational Privilege Tax (or “head tax”), a $2-per-employee levy that brought in $6.1 million annually. City council voted to end the tax in December 2024, leaving budget planners scrambling for alternative revenue streams.
A decision to move domestic violence prosecutions from municipal court to county court is expected to save about $3 million annually starting in July 2025. A recent comment from a city councilmember, which leaked private information about new possible negotiations over domestic violence cases, makes it hard to know if Aurora will still get those savings.
Batchelor and Hays said that over the coming months, the city’s executive team will work with department heads to create a comprehensive budget adjustment plan. The final version is expected to be presented to the city council before summer.
Related to the budget woes is a sense that retail and restaurant businesses are struggling in Aurora. Over the past few months, city officials have worked to develop a strategic program to boost business across the city, which would boost sales taxes. Those plans are still under development.
Too bad the Aurora City Council members aren’t as smart as the budget manager and City Manager. Almost positive the City Council will screw it up! Saw where Murillo was oblivious to the Kevin Bacon remark from Animal House! Funny as all get up and she was absolutely clueless and then got upset about it. Lighten up and grow up!
Too bad the Aurora City Council members aren’t as smart as the budget manager Hays and City Manager. Almost positive the City Council will screw this budget up! Saw where Murillo was oblivious to the Kevin Bacon remark from Animal House! Funny as all get up and she was absolutely clueless and then got upset about it. Lighten up and grow up!
Too bad the Aurora City Council members aren’t as smart as the budget manager Hays and City Manager. Almost positive the City Council will screw this budget up! Saw where Murillo was oblivious to the Kevin Bacon remark from Animal House! Funny as all get up and she was absolutely clueless and then got upset about it. Lighten up and grow up!
Too bad the Aurora City Council members aren’t as smart as the budget manager Hays and City Manager. Almost positive the City Council will screw this budget up! Saw where Murillo was oblivious to the Kevin Bacon remark from Animal House! Funny as all get up and she was absolutely clueless and then got upset about it. Lighten up and grow up!
When budgets can’t be met, cuts need to be made. The quickest start to address the problem is to not backfill open positions. Next, low-performing employees need to be terminated. The employees left working for the city need to step it up and cover the work that is left to be done. Those that can’t should be terminated. There’s no sense in wasting taxpayer money on employees who can’t or won’t do their jobs and pick up the slack. Focus the remaining funds on the highest priority needs of the citizens next. Low priority projects can be put on hold to a future FY. City Council really needs to figure out how the bring business back to Aurora so the city can earn money from sales tax. I don’t have high hopes that the current council has the intelligence to make that happen. They’re more like the Keystone Cops.
You really think culling “low performing ” employees will balance the budget? What is a low performing employee?? We can put off a pickleball court. Maybe cease all council travel, but, business seems good. What would you suggest. ?
No, obviously only reducing the workforce will not balance the budget. The suggestion is part of a larger effort to cut costs. I wholeheartedly agree that travel costs for the City Council and all employees should be cut effective immediately. With technology, there’s no reason anyone in the city should have to travel for business. Cuts to first responder services should be the last thing to consider, but perhaps the city doesn’t need to spend money on water to keep the grass green, cut back on funding for the golf courses (or increase greens fees for the city golf courses), cut back on parks and rec, cut back on road and infrastructure maintenance, etc.
Having worked in government, I have seen first hand how low performing employees bogs down service delivery. Government services need to be efficient, but inefficient employees bring no benefit to the taxpayers. Personally, I don’t want to have my hard-earned tax money go to the salary of someone who arrives right at the 8AM, takes 5 smoke breaks a day and leaves right at 5PM. Those people need to be kicked to the curb. We need city employees who are dedicated public servants and actually earn their pay. If citizens wish to protect underperforming city employees, then they can personally fund their salaries.
I’d also suggest that if governments choose to take all the holidays off each year that they do, then employees shouldn’t be paid for that time off. In the private sector, we typically get two weeks of vacation and 6 holidays: New Years, Memorial Day, Independence Day, Labour Day, Thanksgiving and Christmas. We don’t get MLK Day, President’s Day, Columbus Day, and Veterans Day off. Why should government employees get paid for all those extra days off. This is not making government more efficient.
Just so you know Jonathan, the aurora city golf courses are self supporting. They gain their operating costs from green fees, cart fees and other user fees. They even pay for water that’s used
Why is that the solution for everything? You are aware that the people you would be terminating then become people who put more of a strain on the city right? Cutting the cities workforce is the STUPIDIST way to cut cost. If there is a short fall in the budget you cut back on the most expensive things in the budget first. Which right now is APD and AFD. Both of these agencies take up nearly 300 hundred million in the cities budget (That is a rough estimate from previous years budget.) Cutting 10 million from both would fill in the shortfall. And if their is economic growth than that 10 million would only be for 1 year. Or take 5 million from each and cut the shortfall in half. THEN from there you start looking at making cuts to the rest of the city budget. City workforce, however, should be the last thing cut. I mean, hell we could take it from the councils budget too. But with economic downturn its the people of Aurora who are going to depend on the workers of Aurora to do what they can with what they have. Cutting the work force is like getting rid of the nurses to lower the cost of healthcare. Just dumb.
It’s clear you don’t have the attention span to read through my entire post. Yes, I suggest ridding the city (and State and Feds) of lower performing employees, but I clearly state that funding cuts also need to come from other low priority (read non-essential) programs run by the City. If you understand how businesses operate, when the economy takes a downturn or the company is not performing, employees tend to be the first to be cut. Especially low performing employees. I, for one, don’t want to see my hard-earned tax money paying for low performing employees. Public servants need to be dedicated to their jobs or find something else that suits their laziness. Plain and simple.
I seriously question whether some non-uniformed positions are really necessary and truly adding value.
For instance, does every major department, including Aurora Water really need a PR, Communications or Marketing Manager supervising people who only work for that department?
Meanwhile we can’t get a city map that includes the entire city—20+ years after the southern annexations?
But the Library needs its own Marketing and Communications Manager?
It’s time to consolidate support services. Painful but necessary. And overall quality just might increase.
The Library accounts for less than 2% of the cities budget. Aurora Public Library system is ranked 104 out of 107 in terms of funding across the United Sates. In fact, 1 library in Colorado, just one, has twice the budget of the entire Aurora Library system. That’s 7 libraries. Sooooo… In the long scheme of things, the Marketing team in the library is the least of the cities budget problems. In fact, increasing the funding for the Libraries would probably be a better course of action. It would increase the services that could be provided to the people who are going to face harder economic hardships… everything to canning and gardening to selling art on the side. You can learn all that at the 104th lowest funded library system in the United States. Also, they have these cool things called books. That you can check out and return for FREE. It doesn’t cost you anything! You’d be amazed a how many people don’t know that the library is free to use. Which is probably why the have a marketing team.
curious. people complain about about ‘under performance’ of gov employees. Makes me wonder where you get your information. I can agree with not necessarily needing a Marketing and Communications Manager in all these departments. I doubt ridding ourselves of them would balance the budget though. CM Hancock says we are $700,000,000 in arears on our infrastructure. That’s only about $1,732.67 person (404000 pop). Did you read the budget? Can you line item out those items you don’t like to balance the budget while still providing Police, Fire, Health and City Planning activities? I’d like to see them. Just remember. You may not like something that someone else has gone to bat for. Of course Jonathan wants to “cut back on parks and rec, cut back on road and infrastructure maintenance” wow. Holidays:
(1) January 1st, commonly called New Year’s Day.
(2) The third Monday in January, which shall be observed as the birthday of Dr. Martin Luther King, Jr.
(3) The third Monday in February, commonly called Washington-Lincoln or President’s Day.
(4) The last Monday in May, commonly called Memorial Day.
(5) June 19th, commonly called Juneteenth.
(6) July 4th, commonly called Independence Day.
(7) The first Monday in September, commonly called Labor Day.
(8) November 11th, commonly called Veterans Day.
(9) The fourth Thursday in November, commonly called Thanksgiving Day.
(10) The fourth Friday in November, commonly called Friday after Thanksgiving.
(11) December 25th, commonly called Christmas Day.
Sounds like somebody shoulda considered working for the City, County, State or Federal Government. Or joining a union LOL