Boulder predicts 2027 budget deficit, citing federal cuts
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The city of Boulder is projecting a budget deficit in 2027 driven largely by economic uncertainty tied to federal funding cuts, tariffs and rising inflation.
Threat level: Economists and city budget officials say Boulder is especially vulnerable because of its reliance on federal labs and the University of Colorado — two pillars of the local economy facing growing pressure from Washington.
Driving the news: City budget staff told Boulder City Council at a study session last week they expect a $6.5 million shortfall in 2027.
- Closing the gap will require a 4% spending cut across all departments, with an emphasis on permanent reductions.
- The city has been under a hiring freeze since last summer, and while Boulder City Manager Nuria Rivera-Vandermyde said no new layoffs are planned, she warned that "a hard conversation" is coming about cuts to programs and services.
Zoom in: Boulder's tax revenue has flattened for years, and the city was one of only a handful of major Colorado cities to post a year-over-year decline in sales tax revenue in 2025, according to CU Boulder economists.
- Officials pointed to Boulder's high cost of living, soaring housing prices and heavy concentration of tech jobs, a sector battered by layoffs in recent years.
- The city has also struggled with slower consumer spending and weakening retail growth.
What they're saying: CU economics professor Robert McNown said the Trump administration's attacks on federal labs — including National Oceanic and Atmospheric Administration and the National Center for Atmospheric Research — threaten not just scientific research, but major Boulder employers.
- "It's quite apparent that Colorado is being picked on by the Trump administration … That filters down to Boulder," McNown said.
Between the lines: Boulder budget chief Scott Carpenter said the city lowered its projected revenue by $8.5 million between 2026 and 2027 largely because of federal uncertainty.
- Boulder is "uniquely impacted by federal decisions as the Boulder economy is strengthened by CU and the federal labs," Carpenter said.
- He cited tariffs, inflation and instability tied to the conflict in Iran as growing economic risks.
Zoom out: Brian Lewandowski, executive director of the business research division at CU's Leeds School of Business, said inflationary pressures linked to the conflict in Iran emerged rapidly and would not have been factored into Boulder's future revenue projections last budget cycle.
- "This is something that wasn't on our radar even three months ago, but now it poses a pretty great risk to the health of the overall economy," he said.
- Colorado gas prices rose 9.3% from January to May, Lewandowski said, increasing costs for city operations while squeezing local consumer spending.
The intrigue: The arrival of the Sundance Film Festival could provide an economic boost next year, but city officials say they're not baking that revenue into projections.
- "We are taking a realistic approach in year one of Sundance," Carpenter said.
The bottom line: McNown said the uncertainty created by Trump's "chaos of executive orders" could continue to weigh heavily on Boulder and Colorado's economy.
- "There are a variety of ways in which Colorado is being adversely impacted by what's going on in Washington," he said.