Sixteen months ago, RTD leaders declared metro Denver’s public transit agency financially robust with no warning signs, but the latest records show RTD has fallen into the red, which may force cuts in routes and the frequency of buses and trains.
The agency’s elected directors met Tuesday to vote on a record-high operating budget of $1.5 billion, a 25% increase over this year. Their $100 million deep hole, increasing in 2026 to $248 million, is due to a combination of higher-than-anticipated maintenance and repair costs and falling sales tax revenues, which fund 70% of RTD’s spending. The deficit spending, directors said, will force a rapid drawdown of RTD reserves that were earmarked for service expansion.
“This came as a surprise to all of us,” Director Karen Benker said, calling the situation “sad” and adding she was “shocked” after decades of work on state government budgets that never hit such trouble.
“Once we found out how deep the deficit was, the board and finance committee did not get a chance to go into any real depth because the budget came out so late. We had only a few weeks to see it and ask questions,” Benker said.
Over the past six weeks, RTD managers’ discussions with the directors revealed the troubling financial predicament with hundreds of millions in unanticipated costs of deferred maintenance and repair, largely along RTD’s rail lines. Those costs are on top of the overhauls launched in 2024, including the $152 million downtown track reconstruction and emergency fixes to deal with widespread deterioration of RTD’s104 miles of tracks.
RTD’s descent into debt means transit officials will be hard-pressed to move forward with planned service expansions to reverse the declines in RTD’s ridership, which has decreased from around 106 million in 2019 to a projected 60 million this year.
RTD directors are contemplating unspecified service cuts starting in 2027.
“In the long term, we don’t have enough money to pay for service increases,” RTD director and board secretary Chris Nicholson said Tuesday ahead of the vote. “RTD is facing a long-term structural deficit of hundreds of millions of dollars a year in perpetuity if we don’t take action that either cuts the budget massively or raises new revenues,” he said.
The agency’s exceptionally high reserves in recent years had enticed speculation that RTD could afford to expand routes.
“Looking at our deficits now, we are going to be using those reserves rather quickly,” Benker said. “You have got to pay your bills.”
An agency analysis released last summer estimated the cost of completing FasTRacks to Boulder at $1.6 billion.
RTD’s reserves this week totalled about $1 billion, including $382 million in restricted funds, such as $190 million in internal savings for FasTracks, officials said in response to a Denver Post request. The reserves are meant to cover operating expenses for three months. The total has decreased by 11% from $1.12 billion at the end of 2024, officials said.
RTD reserves in the past have stayed high, compared with Denver’s city government reserves of $180 million, with an annual budget of $1.66 billion, city officials said. Colorado’s state government maintains reserves of $2.1 billion with a budget of $47.9 billion, state officials said.
The agency’s rail and bus systems are more than 30 years old, and maintenance is needed, RTD director and general manager Debra Johnson said.
“This is par for the course. If you lived in a home for 30 years, do you think you wouldn’t have to make some repairs? It’s not going to be in the same condition as when the builder completed it. … This is exactly where we are right now.”
In August 2024, a state audit deemed RTD financially healthy. Former board chairman Erik Davidson, with Johnson, told state lawmakers that “RTD met all financial health ratios with no warning indicators.”
The turnaround has ignited frustration among state lawmakers charged with overseeing RTD, said state Rep. Meg Froelich, a Democrat representing Englewood who chairs the House Transportation, Housing and Local Government Committee. Among her questions for RTD directors: “Why has your comprehensive maintenance plan for the past 10 years been so inept?” Froelich said, emphasizing the need for superior public transit to sustain state-backed high-density transit-oriented development.
“We are going backwards,” she said, questioning whether agency managers can be trusted. “Now are they going to find another $300 million hole?”
Froelich also challenged the assertion that deficits were unavoidable due to maintenance and repair imperatives for the equivalent of a 30-year-old house. “So you didn’t know that, in year 20, your boiler was 20 years old and you were going to need a new boiler? And that, if there were a hail event, you might need a new roof? You didn’t plan for this stuff?”
The Greater Denver Transit advocacy group “is deeply concerned about RTD’s troubling financial position, especially seeing how their story changed so drastically between 2024’s apparent near-term stability and today’s emerging crisis,” said GDT co-founder James Flattum, who also serves on a state oversight committee.
“It is one thing for the agency’s light rail division to have known about repair costs where earlier management irresponsibly told them to wait for decades,” Flattum said. “It is another issue entirely for the light rail department to have missed hundreds of millions of dollars in repairs for years — to the point the hole grew so deep that RTD will have to start cutting its already skeletal post-pandemic bus services as soon as 2027. This is mismanagement.”
On Tuesday night, agency directors were also to vote on a 4% pay raise for Johnson, a lump sum $17,197 payment on Dec. 19, adding to her base salary of $402,325, after a board assessment found she met expectations under her five-year contract that ends this year.
In recent months, RTD staffers informed directors that, instead of carrying out a planned shift of the 955-bus fleet from diesel to cleaner, quieter electric vehicles, agency officials were planning to take on $539 million in new debt over the next five years to replace aging diesel buses with new diesel buses. Directors also learned that RTD managers did not apply for a share of the $1.5 billion in federal government grants for new buses that were doled out in the days before Thanksgiving. Other Colorado transit agencies received a total of $60 million for 13 bus replacement projects, Sens. Michael Bennet and John Hickenlooper announced.
A Nov. 26 email from Johnson to board members confirmed that RTD did not apply “because it was not eligible for the funds” due to a ratio of backup “spare” buses to buses in service too high for federal grant specifications.
The budget problems could also put at risk hopes RTD will helop pay for intercity rail service linking Denver to Boulder, Longmont, Loveland, Fort Collins and other northern Front Range cities. RTD leaders had approved a “joint service” collaborative approach.
But RTD board chairman Julien Bouquet said any RTD support for that project “must make sense” for the agency.
“I understand the frustration when it comes to lawmakers. …The RTD has done the best we can with the resources we have. We are looking into the options,” Bouquet said. “We knew there would be the potential for financial hard times. We are preparing for that and protecting the core of our business. We’re going to be making sure we can protect our service and protect our operators.”
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