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December 4, 2025|Passenger

For Denver RTD, FY26 Budget Tops $1.5B

Written by Marybeth Luczak, Executive Editor
“Increased state of good repair work and some service increases have been made possible by RTD’s healthy financial position and debt prepayment,” according RTD’s FY26 budget announcement via social media. “However, this is not sustainable, and RTD is working toward cost reduction and revenue growth opportunities.” (Courtesy of RTD)
“Increased state of good repair work and some service increases have been made possible by RTD’s healthy financial position and debt prepayment,” according RTD’s FY26 budget announcement via social media. “However, this is not sustainable, and RTD is working toward cost reduction and revenue growth opportunities.” (Courtesy of RTD)
Denver Regional Transportation District (RTD) on Dec. 3 reported that its Board has adopted a $1.5 billion budget for Fiscal Year 2026, which includes appropriations for operating expenses, state of good repair work before carryforward expenditures from the 2025 budget, and debt service.

The budget, which runs from Jan. 1 to Dec. 31, 2026, aligns expenses with the transit agency’s Strategic Plan, minimizes impacts to transit service delivery, and retains the people needed to “deliver its mission,” according to RTD, which provides light rail, commuter rail, bus, on-demand, paratransit, airport, and special event services in eight Colorado counties. The agency noted that transit delivery was balanced with the “navigation of fiscal challenges.” The budget proposal was made available for public inspection in October.

(Courtesy of RTD)

Excluding the impact and timing of the $138 million East Colfax Bus Rapid Transit (BRT) project, RTD said its revenue budget is expected to increase 6% to $1.141 million over the 2025 budget. The agency’s labor and purchased transportation expense comprise 60% of operating expense in next year’s budget.

RTD’s primary source of revenue—69% in the approved 2026 budget—comes from the collection of a 1% sales and use tax in the Denver metro area. “The sales and use tax is subject to external market factors, including inflation, recessions, and the availability of goods and services,” RTD noted. “The budget also accounts for uncertainties in the financial climate for government agencies and private businesses alike.”

The Business Research Division (BRD) of the University of Colorado Boulder’s Leeds School of Business conducted independent third-party research to provide semi-annual sales and use tax forecast models to RTD in September 2025, according to the transit agency. The BRD projected a 1% increase in sales and use tax revenue in 2026, with a forecast of $877 million vs. its latest forecast for 2025; the $877 million in 2026 is 3% lower than the 2025 budget, as BRD’s projections for 2025 declined since RTD adopted the 2025 budget in November 2024, the transit agency said. For 2026, this revenue amount is forecasted to comprise 77% of RTD’s expected funding sources before the impact of East Colfax BRT, it said. BRD’s medium forecast financial models are used by RTD to develop its annual budget and five-year financial forecast.

RTD said it plans to “pare back funding for service contracts in 2026 that did not meet the anticipated budget costs for 2025,” resulting in a projected $17 million savings. The agency’s closed (legacy) pension plan contribution for salaried employees is budgeted at $7 million in 2026 vs. $15 million in 2025, because, RTD said, “the plan is considered adequately funded.” Another budget reduction is the delayed hiring for 81 vacant positions to yield $7 million in savings, and modifications to overtime are projected to deliver savings of $5 million, the agency reported.

While RTD plans no reduction in force for 2026 in the budget, it excludes an allotment for a cost-of-living adjustment or merit increases for non-represented employees. The agency noted that in October 2025 it implemented a cost-saving measure impacting non-represented RTD employees who received a merit increase as a one-time lump sum distribution in 2025 that resulted in $4 million in savings for 2026.

(Courtesy of RTD)

The RTD Board amended the 2026 budget to exclude $20 million in debt financing for cutaway vehicles used for paratransit and FlexRide services, according to the transit agency. The plan includes prepayment of $57 million in 2026 debt obligations “to strengthen the agency’s fiscal performance,” it noted. The approved 2026 budget includes no change to the FasTracks Internal Savings Account balance, which RTD said is currently $192 million. The capital replacement fund is proposed at $166 million, though RTD said it is “not expected to be sufficient to cover capital requirements through 2030.” The operating reserve of $227 million is set at three months of operating expenses according to fiscal policy, it noted.

Debra A. Johnson (Courtesy of RTD)

RTD said it will monitor expenditures throughout 2026 to identify further savings opportunities, while avoiding actions that would postpone funding for preventative maintenance or equipment replacement. Additionally, it said the Board “will continue to incorporate a budgetary monitoring system that charges expenditures against approved appropriations.”

RTD’s FY 2026 budget complies with Colorado Local Government Budget Law.

“The 2026 budget includes an overview of cost-saving recommendations to more closely align expenditures to projected revenue,” RTD General Manager and CEO Debra A. Johnson said. “RTD will take a disciplined approach to managing expenses in the year ahead, and the agency is proposing implementation of a variety of opportunities that reduce costs and ensures good fiscal stewardship.”

In related news, RTD earlier this month released its third-quarter financial results for FY25. While total revenue rose to $321 million, up $41 million or 15%, from the same period last year, it fell short of budget projections by $21 million or 6%, according to the transit agency.

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