Earlier this month, Boulder’s City Council got a “sober” look at the city’s financial future. At a recent council meeting, city staff sounded the alarm about the potential for a tight city budget in 2025.

This, of course, should come as no surprise. The economic picture around the county has been a topic of concern since the post-pandemic boom started to cool. Inflation has remained frustratingly high, worker shortages have taken their toll and interest rates have cooled the housing market, according to Richard Wobbekind, associate dean for business and government relations at CU Boulder’s Leeds School of Business.

For Boulder, though, budget concerns have stemmed from two major places, according to city staff: First, revenue from the city’s sales and use tax, which makes up about 40% of the city’s total revenues, has been flattening, and that trend is expected to continue through this year. And second, the future of property taxes, another major revenue source for Boulder, is uncertain because of new legislation and possible ballot measures that could come into play this year.

There is a lot to unpack here. To start, Boulder is an ambitious city. Not only do we have typical budgetary expenditures, such as utilities, police, parks and recreation, open space, transportation and fire rescue, but we have also set ambitious goals, such as doing our part to address climate change and providing housing and resources for our unhoused neighbors.

These sorts of goals, of course, are the endeavors of departments that get money from our general fund. But the point we are trying to make is that we are continually investing in our community by creating new programs and services in order to keep striving to lift up everyone in our community. In other words, our budget is not static; our local government, much like our population, is growing and changing.

This mindset, though, should not be mistaken for an excuse for rampant spending or fiscal irresponsibility. While the city of Boulder needs to grow and evolve along with our community, it also needs to ensure it is a good steward of our tax dollars.

The city of Boulder is a $500 million business seeking to serve more than 100,000 citizens. There are some 1,400 employees spread throughout the community doing all sorts of jobs. The city is a property owner, a landlord, a utility provider and so much more. It is responsible for our safety and for the maintenance and beauty of our public spaces. Essentially, the city’s purview is huge, and the bigger something gets, the harder it can be to keep everything running efficiently. Our leaders, then, must stay vigilant and work to focus our finite resources where they can best serve the city.

The same can be said for the citizens of Boulder. Our resources are finite, and so too are our tax dollars. We cannot expect to be able to fund each and every project we may find ourselves desiring. And we must be careful when considering dedicating our tax dollars to a particular service or project.

As it stands, roughly 68% of Boulder’s funding is currently dedicated or restricted for specific purposes. Dedicating such a huge portion of our funding is a great way to ensure our favorite projects are always well funded, but it also serves to limit the city’s options when the budget must be tightened.

To be clear, dedicated funding can be great. Last year we supported Ballot Issue 2A, which extended an expiring sales tax and dedicated half of it to the arts. Similarly, we also called for a dedicated tax to help our community fund a mental health facility to address our dire lack of resources and services for those with mental and behavioral health issues.

The point here is that dedicated taxes have their purpose, but we must be careful locking them in. No one wants to see their favorite service or a service they rely on at the receiving end of a budget shortfall, but it’s important to remember that we all feel that way. We must, then, ensure the city has the flexibility to meet shortfalls in an equitable, dynamic fashion.

Finally, it is also important to address the factors that are leading us toward a tight budget: flatlining sales and use tax revenue and the uncertainty regarding property taxes.

At the moment, there isn’t much we can do about the property tax situation — except to educate ourselves on the measures that make it on the ballot in November and then vote on them wisely. But we can continue working to address the reasons our sales and use tax revenue is declining.

At a City Council study session earlier this month, Boulder budget officer Charlotte Huskey said there are multiple factors contributing to the current slowdown, such as a slowing of local retail activity and high commercial vacancy rates. An aging population, a shortage of affordable housing and the rise in remote work have also played a part.

These are big, complicated issues and, in a lot of ways, they are caused by or correlate with statewide and national issues. Boulder is certainly not alone in having a high commercial vacancy rate, nor is it the only Front Range community with an affordable housing shortage, nor is it the only place that has seen remote work hollow out our commercial centers just a little bit too much.

But we can continue investing in initiatives and programs that seek to address these issues in order to see a return on our investment in the form of increasing our sales and use tax revenue. Put at its most simple, bringing more people to Boulder is one to address this problem. Of course, we don’t mean flooding our city with transplants, but addressing our shortage of affordable housing and middle housing (for young families and their children) to provide those who already work here with the ability to live here could really help boost our economic engine. We need to transform our in-commuters from people who drive in for work and occasionally buy a sandwich for lunch into Boulderites who shop and eat and go to the movies here.

Pushing for an economic boost in this manner is important because it is better than the alternatives: increasing our taxes or simply making big cuts to our budget. (Though it is worth noting that if cuts must be made, Boulder has something like one employee for every 75 citizens — maybe more efficiencies could be found there.)

Boulder is a living, breathing community. And to keep our community vital — to fund all the departments and services and programs that we cherish, and those that we rely on for utilities and safety — means we have to be willing to see our community change.

Gary Garrison for the Editorial Board