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Denver officials expect 2022 financial footing to reach pre-pandemic levels

The COVID-19 pandemic is not over, but Denver Mayor Michael Hancock’s proposed budget for 2022 indicates optimism about how the city is recovering from the health and economic crisis.

Hancock and his staff projected Wednesday there will be $1.485 billion in the general fund revenue to tap into for 2022. That’s 12% more than the $1.33 billion projected for this year due to the pandemic taking its toll on a municipal income that relies heavily on sales and use taxes.

If the projections hold for 2022, Denver will be on a similar footing to where it was at the outset of 2020, when the Hancock administration projected $1.486 billion in revenues. The city ultimately fell $211 million short, according to the finance department.

In his budget letter released Wednesday morning, Hancock laid the recovery largely at the feet of COVID-19 vaccines, noting more than 70% of eligible city residents have gotten the shots. He said that — and hundreds of millions of federal COVID aid dollars — is allowing the city to focus on recovery.

“My 2022 budget is fiscally responsible, equitable, invests in our neighborhoods, bolsters our local businesses, and serves as a driving force for our recovery,” Hancock wrote.

At a news conference later Wednesday, Hancock and members of the budget and finance department summarized some top priorities — including infrastructure, housing and helping the unhoused.

The plan is to tap into not only the city’s budget, but also federal American Rescue Plan funding and proposed $450 million in bond funding, said administration officials. But ultimately, votes from Denver residents this November, as well as the City Council, will dictate what money goes where.

Hancock’s 2022 spending plan includes:

  • Infrastructure: More than $200 million-plus for upgrades; includes $85 million for transportation and mobility projects, $42 million for improving city facilities including $10 million for modernizing the Central Branch of the Denver library. The transportation spending proposal marks a 1000% increase from 2021, city officials say. That is being boosted by $9.2 million in extra revenue from parking meters going up to $2 per hour from the $1 per hour they sat at for 20 years.
  • Housing and the unhoused: $190 million; includes $31.9 million for the city’s dedicated affordable housing fund. The 2020 voter-approved homelessness resolution fund sales tax is providing $40.9 million that the city wants to use for acquiring and developing more housing and shelter options. And $20 million in federal dollars would go to services for the unhoused, like upgrading to city rec centers for use as emergency shelters.
  • Police and firefighters: $13.6 million to go to hiring in the city’s police, fire, and sheriff’s departments and 911 call center.
  • Rainy-day reserve: $213 million or 14.2% of the budget.

Hancock and Chief Financial Officer Brendan Hanlon emphasized the city is paying close attention to the pandemic-induced divide between high-wage workers and low-wage workers and plans to address that gulf with a drop-in-the-budget $1.4 million “Investment Impact Fund.” The aim is to support people in economically vulnerable parts of Denver where city infrastructure investments are contributing to gentrification.

“We are focused on equity across the city but particularly in our neighborhoods that have been most vulnerable to displacement,” Hanlon said at the news conference.

Hancock took a moment Wednesday to call out an item on the Nov. 2 ballot: Initiated Ordinance 304, which was proposed by the leader of the city’s Republican Party. It asks voters to cap the city’s aggregate sales and use tax rate at 4.5% — lower than the city’s current combined tax of $4.81%.

Future tax increases in one area would require making cuts elsewhere under the ordinance, and Hancock called the measure a threat to everything in his 2022 budget proposal and beyond.

“I want to make it very clear, it would result in an immediate up to $80 million in cuts from the budget if it passes,” Hancock said.

The 800-page budget will be subject to City Council hearings and amendments before a vote is ultimately held later this fall.

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