Colorado Springs is heading into 2026 expecting an $11 million drop in its general fund and $33 million less in the full 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. Council President Pro-Tem Brian Risley and councilmember Kimberly Gold were on hand to take the next step in the budgeting process.

The total budget for all city funds is projected to be $907.45 million heading into 2026, continuing a recent trend of the city budget rising and falling from year to year. The proposed budget is more than $33 million below what the city had budgeted for this year but is about $6 million above the city’s total 2024 budget.

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.

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.

“I expect that we will be receiving feedback from those difficult decisions because at the end of the day, it impacts real people, real families, real homes,” said Mobolade, who also said the city’s budget was “doing better than most American cities.”

The furlough days will apply to nearly all non-sworn civilian employees who are paid for through the general fund with the exception of areas like the 911 call center and the pothole repair teams in the city’s Public Works Department.

The impact of the limited budget varies widely from department to department. The Colorado Springs Police Department will see its budget increase 3.6% to just under $180 million, which is a larger increase than police have seen in the previous two years. The Police Department will have 13 civilian positions lose their support from the general fund, leading some to be eliminated and others to have their funding shifted to areas like the Public Safety Sales Tax.

At the same time, a major drop in grant funds will leave the Colorado Springs Fire Department with a projected budget of $108.9 million next year, which is about 4.6% lower than it was in 2025. The department’s support from the general fund is largely unchanged from the current budget.

The Parks, Recreation and Cultural Services Department is facing a roughly $2 million cut to its budget, largely focused on the closure of Meadows Park Community Center and the layoffs of its staff members.

“I believe that what we’ve looked at will be enough that we don’t have any surprises,” City Finance Director Charae McDaniel said. “We will continue to assess all the revenue and if the taxes come in much higher or lower, we’ll make adjustments.”

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. The projection would mark a mild sales tax increase from where the city is currently on track to finish 2025.

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.

One area the budget is not using to balance out the cuts is the city reserve fund, which currently holds enough savings to cover around 20% of the general fund. Risley said that he and other councilmembers had been nervous about using the city savings now, given the economic uncertainty the city still faced.

“That’s the safety net. That is the place where we go when we have problems moving forward with the budget. We don’t anticipate doing that, but it was important to be in alignment with the mayor that we don’t want to go into the reserves,” Risley said.

Last year, Colorado Springs used $3.9 million from the city reserves to help balance the 2025 budget. The original city plan proposed to use even more reserve funds before the City Council made some cuts and reorganized spending.

Mobolade and the City Council leaders had been split heading into the budget discussions about how to use Colorado Springs’ new retail marijuana tax revenue. Downtown leaders and councilmembers had been advocating to use it for the Clean and Safe pilot program that the Downtown Partnership launched during the summer to offer a new source for homeless outreach and private security to downtown businesses.

Mobolade had preferred to keep the money dedicated to city services but said Monday he planned to commit some funding to the Downtown Partnership.

“I have come to the table with President (Lynette) Crow-Iverson to say let’s do this, but we’re also hearing from other councilmembers about what the specific amount is they feel comfortable with,” Mobolade said.

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