Denver’s Regional Transportation District (RTD) 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 agency said in a press release. 

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 includes an overview of cost-saving recommendations to align expenditures to projected revenue more closely,” said GM/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 ensure good fiscal stewardship.”

RTD’s Approved Budget

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 expenses comprise 60% of the operating cost in next year’s proposed budget, the RTD said.

The agency’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. Sales and use tax is subject to external factors, including inflation, recessions, and the availability of goods and services. 

The RTD said its 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. 

Forecasting to Find Solutions

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. 

RTD uses BRD’s medium forecast financial models to develop its annual budget and five-year financial forecast. 

Making Prudent Decisions

The agency plans to reduce funding for underperforming service contracts in 2026, generating an estimated $17 million in savings. Its legacy pension contribution for salaried employees will drop from $15 million in 2025 to $7 million in 2026, as the plan is now adequately funded. Additional savings will come from delayed hiring for 81 vacant positions ($7 million) and overtime adjustments ($5 million).

RTD officials said it does not plan workforce reductions in 2026 but will not budget for cost-of-living or merit increases for non-represented employees. In 2025, the agency shifted merit increases for these employees to a one-time lump-sum payment, saving $4 million for 2026.

The board also amended the budget to remove $20 million in planned debt financing for paratransit and FlexRide cutaway vehicles. The plan includes $57 million in debt defeasance to strengthen the agency’s long-term financial position.

The approved 2026 budget maintains the FasTracks Internal Savings Account at $192 million. The capital replacement fund is set at $166 million, though it will not fully cover needs through 2030. The operating reserve is set at $227 million, equal to three months of operating expenses.

RTD officials said they will closely monitor spending throughout 2026 to identify additional savings without delaying preventive maintenance or equipment replacement. The board will continue using a budget monitoring system that tracks expenditures against approved appropriations. The FY 2026 budget complies with Colorado Local Government Budget Law and covers Jan. 1 through Dec. 31, 2026.