City of Loveland Budget Watch 2024: City Mulls Service Reductions, Tax Ballot Items Amid Revenue Loss
Starting next year, several City-provided services and programs will be permanently reduced or discontinued as the City of Loveland works to cut millions from its budget in part from the loss of a key revenue stream from grocery sales tax. Impacts include everything from streets, traffic management, facility and park maintenance, police training, reduced or eliminated services and operating hours of the museum, Rialto Theater, Library, parks and recreation, and funds to support community groups, small businesses and nonprofits.
Without another significant revenue source before the beginning of 2025, this major budget deficit that began in 2024 is expected to continue indefinitely – affecting most departments funded by the General Fund.
How did our city get here?
Since as far back as 2016, the cost to provide City services has exceeded the amount of revenue we receive to pay for those services. Until 2023, grant money and income from large development projects helped us through. A citizen-led petition and voter-approved ballot measure to remove sales tax on food for home consumption during the November 2023 election put additional pressure on City’s financial situation. The voters have spoken; yet the unintended consequences mean that important decisions need to be made – and quickly. Based on calculations and real-time information from the Finance department, this will remove millions from City revenue streams indefinitely.
Learn more about the City’s different funds and how General Fund dollars from taxes are used.
What might budget cuts look like?
Using a strategic method for prioritizing programs and services, along with input from City Council and the public, City leaders returned to City Council earlier this week for their third discussion on the issue, presenting more-specific potential impacts.
Several changes have been proposed since the June 11 City Council meeting. Those are:
- The Library and Cultural Services departments would face smaller budget cuts, reduced from 50% to 33%.
- The Loveland Fire Rescue Authority (LFRA) will also see smaller cuts than previously recommended.
To make this adjustment, another $500,000 will be taken from the Parks and Recreation department, and more will be cut from the Public Works department.
In total, the latest draft for 2025 includes $12.2 million in expense cuts, anticipating $13 million in lost revenue. The anticipated cuts are:
- Public Works: $3.2 million
- Parks and Recreation: $2.95 million
- Library: $1.3 million
- Police: $1 million
- Community Partnership: $985,000
- Contributions to LFRA: $750,000
- Cultural Services: $605,794
- Economic Development: $287,000
- Finance: $250,111
- City Manager’s Office: $236,000
- City Clerk’s Office: $136,000
- Information Technology: $109,446
- Human Resources: $96,000
- Development Services: $74,092
- City Manager’s Office (City Council): $40,000
- City Attorney’s Office: $30,400
Reducing cuts to one area means deeper cuts to another, making this a difficult conversation to have. We are in a zero-sum situation.
Check out the list of City services currently expected to be reduced.
Is the only option to reduce services, or how can we increase revenues?
It is vital to have a balanced budget going into 2025. Based on community conversations, many City Councilors expressed a willingness during the July 9 study session meeting to consider revenue increases that may include sales tax increases or other specific tax items. Proposed ballot language would need to be approved by City Council before any tax increase item is added to the ballot for voters to decide. City staff is encouraged to consider fee increases where appropriate to offset associated program expenses.
Staff will be back in front of council on July 30 to follow up on a potential sales tax ballot discussion.
Loveland currently has the lowest sales tax rate in the region, and the current 3% sales tax rate has not changed in the last 40 years. See how Loveland taxes (and City of Loveland revenue) compares to our neighboring cities.
What happens next?
We’re a few months away from knowing exactly what cuts will look like. Several discussions are planned at future City Council meetings in August and September before a proposed balanced budget is presented to City Council for approval in October.
Details have and may continue to change, so be sure to join the conversation with us.
Calling all Lovelanders!
This situation is happening very quickly, and we want to hear from you!
- ASK your questions on Let’s Talk Loveland and help educate our entire community on this important topic.
- ATTEND the upcoming July 18 hybrid “Budget Funds Explained” event to learn and engage. Register now. Stay tuned for more information about an additional event on August 1.
- INVITE your neighbors to engage in this important discussion. We have educational resources and more right here on Let’s Talk Loveland.
This Budget Watch series is designed to keep the public informed about discussions and decisions around City service and program impacts as the City faces the permanent loss of millions of dollars in revenue to fund services.
