Excess marijuana-tax proceeds would help pay for transportation projects, parks-and-recreation center fixes, and a new community-input program next year under a $2 billion budget proposal unveiled Tuesday by Denver Mayor Michael Hancock.
As Denver draws on money flowing in from legalized recreational marijuana, the city in 2018 also would more directly confront the opioid crisis that has affected communities across the country. Hancock’s proposal includes more than $1 million for new and expanded support services that address addiction to heroin, pain relievers and synthetic drugs.
By and large, however, Hancock’s proposal marks another in a series of boom-time budgets that take advantage of Denver’s economic success to expand in a number of areas that Hancock and City Council members previously laid out as priorities.
Those include long-deferred problems — such as crumbling sidewalks — and attempting to address economic inequality and other issues that are mounting side effects of the city’s rapid population growth.
“This is a spending plan that will allow us to manage population growth and continue to deliver the highest-quality services to the people of Denver,” Hancock said during a morning news conference. “The 2018 budget proposes smart investments that will allow us to directly meet our most pressing challenges. … This spending plan will improve transportation, connect more residents to economic opportunities, help make Denver more affordable for families, assist those in need and strengthen our neighborhoods.”
And then there’s the pot money. His budget would tap $10 million from marijuana taxes — taken from what’s left over after paying for regulatory and law enforcement costs — to provide $5 million for deferred transportation maintenance, $4 million for parks-and-recreation repairs, and $1 million for the community budgeting fund.
Hancock said that latter program, for which some council members have lobbied, would “give residents a direct ability to engage in decision-making and priority-setting for neighborhood improvement projects.” His administration is still working out the input process.
The budget proposal now goes to the council for department-by-department hearings in coming weeks. The council then could request changes from Hancock before taking a final vote by early November.
The largest portion of the $2 billion operating budget is $1.4 billion in spending proposed for the general fund, up 5.4 percent over this year. The general fund covers most day-to-day city operations.
Transportation budget includes sidewalk program
Hancock’s proposal calls for a $31.5 million increase in spending on transportation and mobility — more than 40 percent over typical funding levels — to begin tackling what Hancock has proposed as a 12-year, $2 billion “Mobility Action Plan.”
Next year, that plan would bring 15 miles of new bikeways, reconstruction of eight or so dangerous intersections, and more projects to fix broken pavement and bridges, using the marijuana money.
The city would begin implementing its Vision Zero plan, which calls for elimination of traffic-related deaths and serious injuries by 2030, in part by expanding the use of photo-radar enforcement to catch speeders and red-light runners.
For the first time, the city plans to roll out a $4.5 million sidewalk repair and enforcement program. Since Denver places responsibility on property owners for their frontage, the budding plan includes an income-based assistance fund for homeowners who can’t afford to install or fix their sidewalks, Hancock said.
Councilman Paul Kashmann, who has pushed for such a program for two years, said the city could begin by focusing next year on a sector of the city, potentially by inspecting sidewalks and giving notice to the owners of the need for repair — and then offering assistance, if needed.
The program would mark the start of a multiyear effort.
“I think it’s got great promise,” Kashmann said. “Is it enough? No. Is it a great start? Absolutely. Part of the deal is we don’t know how this is going to play out.”
Separate from the budget, city voters will consider seven Nov. 7 ballot measures that make up the city’s proposed $937 million bond package. If those win approval, they would add hundreds of transportation, parks, building and other projects to the city’s agenda.
Housing impact fee revenue lags
Hancock’s budget proposal wraps in $21.6 million for affordable-housing subsidies and other programs, with $15 million to be paid for through new local funding streams and the rest anticipated from federal funding.
However, a related development-impact fee approved last year by the council for new projects so far is producing much less income than expected. Proceeds are projected at $800,000 this year, compared with an earlier estimate of $3.5 million.
That will require transfers from the general fund to ensure that the city has $15 million in local money, officials say.
The city also would create a new “affordability assistance fund,” setting aside $500,000 for one-time help for residents struggling to afford housing costs, utilities and food expenses.
Other housing-related efforts include expanding the city’s financial empowerment center education program and expanding a property tax rebate program for seniors and the disabled.
More spending on cops and the homeless
Denver police would hire 100 officers under the budget plan, mostly to offset retirements but also to ensure a net increase to the ranks of 22 officers. That would boost the authorized force to 1,525, at a cost of $1.8 million.
And the Denver Sheriff Department would hire 32 additional deputies, including to staff the new Building 24 women’s facility at the county jail on Smith Road.
Other notable proposals in the budget include:
- $4.4 million for enhanced emergency homeless services and facilities, as well as an increase in the capacity of a program that provides supportive housing for the chronically homeless, from 250 people to 350. The city would spend $450,000 to expand the Denver Day Works program, which provides day-labor jobs to the homeless.
- $1.1 million for an expansion of a “co-responder” program that pairs mental health professionals with police officers.
- $366,000 for increased security and cleaning at the Central Library, which has dealt with a surge in homeless visitors and drug activity. Another $166,000 would provide another social worker at the library.
- $350,000 for an initiative that would make city investments in some low-income neighborhoods and support minority- and women-owned businesses.
A big boost for city employment
New hiring across the board next year would add up to a big increase in city employment — with 12,457 current permanent and temporary positions projected to grow by 461, or 3.7 percent.
Those new positions are intended to help ramp up the expanded slate of transportation projects and grow other programs, as well as fill service gaps in areas including building permit reviews and inspections. The 911 call center, which is budgeted for 10 new employees, has struggled to fill vacancies and keep up with call volume.
“We wouldn’t be hiring staff if we didn’t have the revenue to support it,” chief financial officer Brendan Hanlon said. “But it’s also the demand on the system — you have certain needs of a growing city.”
The budget also proposes merit-based raises for all employees that would average about 3.3 percent, totaling $9 million.
Although tax proceeds and other revenues for the general fund are expected to increase by only 3.9 percent — compared with 5.4 percent growth in spending — Hanlon says his office balanced the budget primarily by using excess reserves for one-time expenses and capital projects. That is a standard city practice.
Hanlon’s staff projects reserves still will stand at 15.2 percent of general-fund spending next year, just above the city’s official target.
Nearly half of general-fund revenue will come from sales and use taxes in 2018, with only 9 percent coming from property taxes.
Taxpayers are facing huge spikes in property valuations that take effect next year, but they triggered a growth cap that keeps the city from pocketing all of the resulting increase in tax revenue. The growth cap, imposed in place of the Taxpayer’s Bill of Rights under a 2012 measure approved by voters, required enough of a reduction in city property tax rates to trim back a total of $32.5 million from tax bills, a city finance spokeswoman said.
Read the budget letter here.