RTD’s 2026 budget will balance transit delivery with navigation of fiscal challenges
The agency is implementing cost-saving measures in 2026 to maintain service levels, fulfill core functions, and retain its workforce
DENVER (Dec. 3, 2025) –– The Regional Transportation District (RTD) Board of Directors approved a $1.5 billion budget for Fiscal Year 2026, an amount that includes appropriations for operating expenses, state of good repair work before carryforwards, and debt service. The budget aligns expenses with RTD’s Strategic Plan, minimizes impacts to transit service delivery, and retains the agency’s people power needed to deliver its mission. The 2026 budget was first made available on Oct. 10 for public inspection.
“The 2026 budget includes an overview of cost-saving recommendations to more closely align expenditures to projected revenue,” said General Manager and CEO Debra A. Johnson. “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.”
The approved $1.5 billion in appropriations is before capital carryforward expenditures from the 2025 budget. Excluding the impact and timing of East Colfax Bus Rapid Transit (BRT), RTD’s 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 proposed budget.
RTD’s primary source of revenue, 69% in the approved 2026 budget, comes from the collection of a one-percent 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. The agency’s finance team closely and regularly monitors financial forecasts, year-to-date expenses, and revenue projections to guide fiscal year budget development. 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. The BRD projected a 1% increase in sales and use tax revenue in 2026, with a forecast of $877 million versus their latest forecast for 2025; $877 million in 2026 is 3% lower than the 2025 budget, as their projections for 2025 declined since RTD adopted the 2025 budget in November 2024. For 2026, this revenue amount is forecasted to comprise 77% of RTD’s expected funding sources before the $138 million impact of East Colfax BRT. BRD’s medium forecast financial models are used by RTD to develop its annual budget and five-year financial forecast.
The agency 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 as compared to $15 million in 2025, because the plan is considered adequately funded. Other reductions in the budget include delayed hiring for 81 vacant positions to yield $7 million in savings. Modifications to overtime are projected to deliver savings of $5 million.
RTD plans no reduction in force for 2026 in the budget; however, it excludes an allotment for a cost-of-living adjustment or merit increases for non-represented employees. In October 2025, the agency 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.
The Board amended the 2026 budget to exclude $20 million in debt financing for cutaway vehicles used for paratransit and FlexRide services. The plan includes defeasance – or prepayment – of $57 million in 2026 debt obligations to strengthen the agency’s fiscal performance. The approved 2026 budget includes no change to the FasTracks Internal Savings Account balance which is currently $192 million. The capital replacement fund is proposed at $166 million, though 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.
RTD will monitor expenditures throughout 2026 to identify further savings opportunities, while avoiding actions that would postpone funding for preventative maintenance or equipment replacement. 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 and the budget will run from Jan. 1 to Dec. 31, 2026.
RTD’s FY 2026 budget is available on the agency’s website at www.rtd-denver.com/budget.