Boston Mayor Wu proposes $4.8B city budget with 4.4% spending increase

Boston Mayor Michelle Wu proposed a $4.8 billion city budget that she says may need to be adjusted down the line depending on the outcome of potential federal funding cuts, some of which the city is already challenging in court.

The mayor’s proposed fiscal year 2026 budget, filed Monday with the City Council, represents a roughly 4.4% increase over the prior year’s spending plan of about $4.6 billion.

Growth for the current fiscal year’s budget was roughly 8%, and the more restrained spending is entirely intentional, Wu said in a letter to the City Council.

“With over $300 million of federal funding supporting critical city services each year, and with nationwide economic impacts from federal tariffs and other federal actions already taking a toll on consumer confidence, tourism from international visitors, higher education and healthcare, critical research and innovation, and the broader economy, we must exercise caution to ensure stability for our communities,” Wu wrote.

Such an approach, the mayor’s letter states, is aimed at “preparing for worst-case scenarios while refraining from preemptive disruption of city services.”

Part of the city’s belt-tightening amid the federal “uncertainty” includes eliminating hundreds of long-term vacant positions, thereby reducing overall headcount in the FY26 budget, Wu wrote.

The City Council has put that number at 2,000, but the mayor, who said she plans to eliminate all long-term vacancies, has not yet confirmed the body’s figure. The budget also increases salary savings “where appropriate,” and reduces discretionary non-personnel spending, the mayor’s letter states.

Asked by the Herald whether the city has received any indication of whether federal funds would be reduced this year, Wu said she hadn’t, but said there have been some preliminary actions taken that are being challenged by the city in court.

Wu said there was some unspent COVID emergency relief grant funding for the Boston Public Schools that was canceled, along with a development pipeline grant, although the courts have paused the latter cancellation.

“Some of this is just working its way through the court system,” Wu told the Herald. “So we don’t have either the full picture of what may happen with these various federal funding streams, or whether attempts to rescind them will be legal and actually allowed to happen by the courts.

“Because of all that uncertainty, we have to plan for the worst-case scenario and preserve our ability to manage uncertainty, even as we continue to maintain the level of city services that we know our residents and businesses rely on,” she said.

Wu said federal funding uncertainty means that the budget will be subject to change after it is approved by the City Council, which by its own authority, has the ability to reject, amend or approve the mayor’s spending plan.

“It is looking to be a very chaotic next four years of this presidential administration, and so we will always act on the best information we have,” Wu said. “The budget will be finalized and approved as a balanced budget as of June 30, but we will continue to manage that budget every single day for the next fiscal year.”

In her letter, she said her administration would “adapt this budget proposal if needed as the scale of economic uncertainties and consequences of federal policies continue to emerge.”

While the mayor, who has tangled with the Trump administration over immigration and other policies, said her focus was on assembling a “lean” budget, certain city departments did see increases in their overall proposed spending.

The police and fire departments would see slight increases of 0.5% and 1.3% to bring their respective budgets to $477.3 million and $310.6 million; the public works department budget would increase by 9.2% to $131 million and the Boston Public Health Commission would grow by 3% to $144.3 million, according to an analysis by the Boston Municipal Research Bureau.

Wu, in her letter, cited additional recruitment classes for the police and fire cadet programs for public safety hikes, and a focus on work with homelessness, opioid addiction and senior programming for the Health Commission.

Her budget message also highlights a 6.6% spending increase for the streets cabinet, which is largely related to new trash collection contracts, and a 7.7% hike for the information and technology cabinet, for 311 constituent call system upgrades.

The largest part of the city’s spending plan is the Boston Public Schools budget, which was approved by the School Committee at $1.58 billion, which represented a 3.5% or $53 million increase.

The Council votes on the BPS budget, which does not yet include the costs of the tentative new contract reached with the Boston Teachers Union, separately.

The FY26 budget also includes investments in the Elections Department “to help implement necessary operational reforms and improvements,” Wu’s letter states, as part of state oversight that was initiated after a chaotic presidential election that led to widespread ballot shortages in Boston.

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Budgets were reduced for the mayor’s office of housing and property management due to a prior one-time investment, some departments in the equity and inclusion cabinet due to centralizing cabinet functions, and the city’s new planning department and office of workforce development due a more accurate assessment of their needs as new city departments, Wu’s letter states.

If the mayor’s tax shift bill were to pass the state Legislature, certain aspects like tax rebates for homeowners and increases in the senior homeowner exemption and personal property exemption for small businesses, would be paid out of the city budget, Wu said.

“The way that it’s structured, it would come from reserves, but given economic volatility, of course we will have to assess the larger economic needs of the city in that moment,” Wu told the Herald.

The mayor also proposed a $4.5 billion five-year capital plan for FY26-30.

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