Castle Rock budget projects sales-tax growth as home permits lag

Castle Rock’s proposed 2027 budget forecasts $99.3 million in sales-tax revenue, assuming annual growth of 4.5%, while the town’s midyear review found homebuilding below the pace assumed in its 2026 budget. The proposed budget attributes much of the 2027 sales-tax forecast to Costco’s anticipated opening.

Through June 30, 2026, the town had issued 106 single-family permits and no multifamily permits. The 2026 budget had assumed 300 single-family permits and 110 multifamily units for the year. The second-quarter financial review says slower-than-anticipated growth is affecting revenue. Impact and system-development fee revenue was below its year-to-date budget, which the town attributed to fewer-than-estimated licenses and permits.

Sales-tax collections were higher than a year earlier. The town collected $45.8 million from January through June 2026, compared with $42.7 million in the same period of 2025, a 7.2% increase, the town’s sales-tax report shows. That first-half comparison is distinct from the proposed budget’s 4.5% annual growth assumption for 2027.

The proposed townwide budget totals $411.8 million, with $348.5 million in expected revenue and $63.3 million from capital reserves. It includes five Fire and Rescue positions and five Police positions. Three proposed fire positions and a traffic officer would be additions to voter-approved staffing levels; two firefighter/paramedic positions were already planned, while two Strategic Response Center officers would move up from 2028. The proposal also includes water-rate and fee increases of 4% to 5%, higher growth-related water system development fees, and increases to some recreation and golf fees.

The 2027–2031 capital improvement plan totals about $291.3 million and includes nearly $147 million for water, stormwater and wastewater projects.