The city of Alamosa is anticipating a slowing economy in building its annual budget for 2026 and then looking at future years and what the city can realistically expect for tax revenue growth.
Finance Director Leanne Lounsbury said the city looks at a 10-year plan in projecting its tax collections and other revenue streams to ensure anticipated total revenue can cover anticipated increases to expenses.
In reviewing its 10-year plan this year, the city lowered its expectations for annual sales tax growth in 2026 and beyond. The review led the city to propose no cost-of-living adjustment (COLA) for municipal employees next year and instead budget for an up to a 4 percent pay-for-performance hike in city salaries.
The city also reduced its sales tax collection projections beyond 2026. Normally, the city factors in a 3 percent increase in annual sales tax growth in its 10-year plan, but those projections have been reduced to 1 percent for 2027 through 2029 and then 2 percent in 2030.
“We are anticipating both a slowing/flat tourism economy and continual slowing/flat national economy,” said Lounsbury. “There seems to be a fair amount of unpredictability at the national level as it relates to decisions impacting both the economy (tariffs) and tourism (international tourism is down).”
The city council will look to adopt the 2026 budget at its meeting on Wednesday, Oct. 15. City leaders are proposing 2026 general fund expenditures of $22.8 million and total expenditures of $47.2 million when factoring in its streets trust fund, servicing debt, and its firemen’s pension cost among other expenses that don’t show up in the general fund.
The general fund typically pays for core city services such as police and fire, public works, and other major city services. Alamosa spends around 23 percent of its general fund budget on police, including administration and support services.
“Looking at the 10-year plan, it was determined that we could only afford the up to 4 percent pay increase for employees and not the COLA in addition to the pay for performance,” Lounsbury said of next year’s budget.
The city sees revenue from its 2 percent sales tax on retail goods within city limits being reduced by $40,980 or nearly 1 percent in 2026, while projecting an extra $56,507 or 1 percent growth in the 1.2 percent sales tax it collects in unincorporated Alamosa County.
Customers to the new Love’s Travel Stop in East Alamosa, for instance, will pay the city’s 1.2 percent sales tax since the store is located outside the city limits versus the 2 percent sales tax if the store resided within the city limits.
Visits to the Great Sand Dunes National Park are down 1 percent so far this year, according to national park data. The Great Sand Dunes is a good bellwether for how the Valley’s overall tourism economy is faring, with Alamosa the city that benefits the most through its national hotel chains.
EDITORS’ NOTE: This story has been edited to reflect the correct proportion of the city budget devoted to police.