Last year, Mayor Mike Johnston characterized the 2026 budget as cut “to the bone,” but if there is nothing left to cut without affecting core services, as he warned City Council members, what exactly changes in 2027?

Not much, according to city officials, who say next year’s budget will likely look a lot like this year’s, with Denver Mayor Mike Johnston’s office already cautioning city departments that feats of fiscal improvisation may be needed heading into the new year.

“As of today, revenue is projected to remain flat — which we planned for — and we are aligning the budget accordingly,” Johnston spokesperson Jon Ewing told The Denver Gazette. “That means that while we won’t see reductions, departments may still need to get creative to balance increased costs around materials, services or labor.”

But even with Johnston’s “baseline” budget now in the hands of the Denver City Council, there’s no way to know exactly how “tight” things may be — at least until September, when the mayor delivers his proposed 2027 budget. 

Although final budget decisions are still several weeks away, one thing is sure: city department heads are tight-lipped about exactly what’s on or off the table for 2027.

The Department of Public Safety accounts for one of the biggest bites out of the city’s general operating fund, accounting for close to $643 million of $1.66 billion.

“We are still early in the budget process and have not made any final budget-related decisions,” Elizabeth White, a spokesperson for the office of DPS director Al Gardner, said. “However, as with last year, the city will continue to prioritize public safety and core, public-facing services.”

But last year, Denver approved two multiyear collective bargaining agreements that would provide across-the-board salary increases for both the Denver Police Department and the Denver Fire Department.

The Denver Gazette reached out to both the Denver Police Protective Association and Denver Firefighters Local 858 for comment, but neither responded before this story published.

However, in September, the Denver City Council voted 9-4 to approve the collective bargaining agreement with the Denver Police Protective Association and several heated exchanges occurred among council members.

Concerns erupted over the perception that pay raises for police officers were being approved amid the city’s recent 2025 layoffs and its looming $200 million budget deficit.

At-large Councilmember Serena Gonzales-Gutierrez said she was unable to support the agreement not only because of the budget shortfall, but also because some city employees who hold positions not funded by general fund dollars, such as airport employees, were required to take furlough days in “solidarity and consistency” with all city workers.

So, how creative will Denver have to get to meet those contractual pay bumps in 2027 on a 2026 budget?

Some Johnston critics have floated the notion that the administration may be eyeing an opportunity to revisit and renegotiate the collective bargaining agreements to reduce budget obligations, a position that Johnston’s office and the city’s Department of Finance both deny.

Johnston’s office said they are well aware of the collective bargaining agreements and have accounted for the price tag in the 2027 budget, crediting last year’s budget work with placing Denver in “a much stronger place today.”

“Costs rise each year, and we align our budget accordingly,” Ewing said.

“When there are anticipated cost increases, for example, personnel costs, higher gas prices or higher costs for the goods and contracts the city purchases, these costs still need to be managed within existing budgets,” Laura Swartz, communication director for the City’s Department of Finance, told The Denver Gazette. “The reductions the city has already made have put us in a good position to be able to address these costs.”

Earlier this year, city finance experts told members of a budget and finance committee that “flat” revenue growth was the “best-case scenario” the city can hope for in 2027. 

Overall, the Johnston administration seems confident in its path forward, despite local and global uncertainties.

“To date, our projections have been right on the money,” Ewing said. “That’s held true even though we didn’t plan for a war in Iran or extraordinarily high gas prices. If revenue remains as is, we will be flat going into 2027. While it may be tight, we are in a much better place today than we were a year ago.”

City finance experts note they are “constantly” monitoring Denver’s incoming revenue.

“So far in 2026, the city’s revenue projections have proven accurate,” Swartz said. “While we are not expecting sudden revenue growth, we were also not seeing significant declines as of June. We expect 2027 to be roughly the same as this year, noting that we are still early in the 2027 budget process.”

Last year, Denver’s city budget focused on closing a $200 million deficit; 2027 is more about balancing the city’s fiscal challenges with the responsibilities to its residents.

In a formal letter to the mayor, Denver City Council members outlined their 2027 budget goals, focusing on core city services, housing affordability, community safety and climate resilience, while seeking to divert further cuts to these essential operations.

The city’s main sources of revenue — sales and use tax and property tax — have been roughly flat from 2023 through 2025, with overall revenue remaining at $1.6 billion.

Denver is, according to experts, operating in a “structural balance,” meaning that its ongoing revenues roughly equal its outgoing expenses.

While this avoids large deficits, it also leaves little room to absorb rising costs without making trade-offs.