After a rough economic year due to the loss of millions in recreational marijuana revenue, Manitou Springs has seen a tepid but steady start to its most lucrative season.

“I think the numbers are promising moving forward,” said Nate Moore, a senior budget analyst with the city, at a presentation on Tuesday evening.

The latest sales tax numbers, which include revenue from the city’s two dispensaries, are compiled through April. This year’s totals show a sharp decline from the past two years, especially when it comes to revenue collected.

Marijuana revenue plummeted last year, when a ballot measure went into effect in neighboring Colorado Springs to allow recreational sales. Manitou Springs lowered its special marijuana tax to Colorado Springs’ rate, but dispensary owners still said that sales were down as the ballot measure took effect last spring.

The situation drove a $4 million budget deficit that the city is still attempting to bridge without dipping more into its emergency reserves. Last fall, Manitou Springs voters rejected a near tripling of its amusement tax, which applies to the sale of tickets.

For the last month reported, April, Manitou Springs sales tax revenue is behind the 2025 total by 20%. Actual sales are down less than 2% for the same month.

June and July are typically the city’s busiest months for sales, coinciding with a strong summer tourist season. In 2024, both months broke a million dollars in sales tax revenue. That was not the case in 2025, and 2026 is shaping up to fall even shorter. The city has collected 38.4% less sales tax this year compared to 2025.

The numbers suggest Manitou Springs is still facing a structural budget deficit. The latest amended budget showed about $325,000 in cuts from city services, including fire and police. The cuts correspond to about 2.35% of the budget.

Councilwoman Judith Chandler said she wanted to ensure Manitou Springs kept adequate staffing for public safety.

“I want to make sure we’re keeping the city safe,” she said.

According to City Administrator Denise Howell, the city cut one police officer position but otherwise planned to be fully staffed.

Moore said that this year’s original budget expenditures were also down about $736,000. The forecast for Manitou’s ending unassigned fund balance, which the city needs to keep above a certain level in case of emergencies and to maintain its financial rating, has gone from about $4.3 million to $7 million.

Despite a leaner budget, the city is still spending its reserves. The latest budget predicts the town will lose about $1.4 million this year from its unassigned general fund balance.

The Manitou Springs City Council will consider approving the amended budget at a public hearing next month.