Mayor Wu and the Boston City Council clinched a budget agreement for FY 2026 with a June 9 signing event highlighting restraint, responsiveness, and efficiency.
The original operating budget filed by the mayor totaled $4.8 billion. The increase over the FY2025 total was 4.4 percent, in contrast with the previous year’s increase of 8 percent. Budget revisions approved unanimously June 4 by the council totaled $9.05 million — less than one percent of the total, but enough to cover items advanced by several members. Still awaiting action is the $4.5 billion capital-spending plan for 2026-2030.
One year ago, the council voted for operating budget changes amounting to $15.3 million, only to have most of them vetoed by Wu. Resolution would only come in the final days of the fiscal year, after a lengthy council chamber hearing followed by a marathon meeting with flurry of piecemeal override measures. At the signing for the FY 2026 budget, the mayor and councillors shared credit for meeting needs and finding agreement, while they addressed new fiscal challenges.
“This is a direct reflection of Boston’s strong economy and a testament to financial management, decision-making and leadership that we are celebrating collectively here today,” declared Wu. “So, although we’re facing the same uncertainty that cities everywhere are dealing with right now, the reality is that Boston is in the best possible position to weather this moment. We will not be pushed backwards, even with all of the challenges and all of the uncertainty happening in other parts of the world.”
The city’s chief financial officer, Ashley Groffenberger, observed that “the budget we are approving of today reflects consistent and stable revenue growth, but is more modest compared to prior fiscal years. Most importantly, this budget prioritizes fiscal responsibility meeting our long-term obligations, while maintaining excellent city services and recognizing and adapting to an unpredictable economic climate.”
As outlined by the council’s Ways and Means chair, District 4 (Dorchester/Mattapan) Councillor Brian Worrell, the added items include another $3.15 million for housing, with a $1.6 million increase for city vouchers, including $300,000 more for homeownership vouchers and staffing.
“There are a lot of people that don’t qualify for Section 8 (rental subsidies) because they make too much money, but they also don’t make enough to buy a home in Boston,” Worrell explained. “With the homeowner voucher program, we can help with that, and we can set our own guidelines.”
In a statement summarizing the budget amendments last week, Worrell said, “This entire package should result in a safer and more stabilized Boston that protects its most vulnerable residents, while protecting critical programs from threats to federal funding.”
In May, the Boston Housing Authority warned that it might have to terminate 8,000 rental housing vouchers due to proposed federal funding cuts.
The next largest spending items in the amended budget were $1.7 million for youth programs and $1.3 million for community safety. Before approving the changes on June 4, councillors took turns mentioning items they backed. These included spending for mental health services, cited by Councillor-At-Large Erin Murphy, and spending advocated by District 3 (Dorchester) Councillor John FitzGerald for more weekend youth “activation and programming” to head off the kind of disturbances that took place in recent years at the South Bay Mall.
“We need to make sure it’s the entire weekend every summer that these kids have other opportunities available to them,” Fitzgerald said in an interview Monday. “We were able to get that through and we’re proud of that.”
Among the other items added were funding for right to legal counsel to help prevent homelessness, English language classes, and aid to families faced with financial setbacks related to immigration enforcement.
Murphy and fellow at-large member Julia Mejia cast the only two “no” votes on the separate budget for the Boston Public Schools (BPS). In explaining her vote, Murphy expressed dissatisfaction with overall school performance and the BPS transportation provider, Transdev, but she praised the mayor’s original budget plan as a “good starting point for us to jump off of.”
Though Boston has continued to collect the maximum property tax revenue allowed by Proposition 2½, an overall downturn in commercial property values—most prevalent in older, downtown office space—has resulted in more of the tax burden shifting to the residential property class. During that time, the class has experienced higher value growth in overall values and a larger increase in the tax rate than for commercial properties.
In a June 5 report, the Boston Policy Institute (BPI) projected that, over the next five years, tax revenue from the city’s commercial properties would decline by anywhere from $1.4 billion to $2.1 billion. “What’s needed,” the report urged, “is a city budget based on consistent and affordable property tax rates for homeowners and businesses, even if it means collecting less revenue than allowed under Massachusetts law.”
After the signing Monday, Wu denied that the resulting tax burden shift would necessarily reflect a loss of overall revenue. To provide temporary relief from the added tax burden on residential owners, she filed home rule petitions last year that failed to win approval at the State House, and she renewed her call for approval of the latest measure filed earlier this year.
“This is about protecting our residents with the macroeconomic shifts that are happening,” she argued. “It is still needed across every part of our community, especially for our seniors. And we put forward a proposal that keeps all of the elements that would have protected residents already, that are still needed, but also incorporates feedback that we heard even at the very end of the process around making sure that seniors would have additional protections, small businesses would have additional protections.”
An earlier BPI report, in February 2024, warned about declining commercial property values, caused by continued use of remote work, in addition to the shift from in-person retail to e-commerce. A statewide study in May by the Questrom School of Business at Boston University also identified emerging threats to the economy and tax revenues from federal budget cuts, tariffs, immigration enforcement, and student visa restrictions.
When asked about collecting less than a maximum levy or seeking alternative revenue sources, FitzGerald cautioned that new levies could also produce new tax burdens or barriers to growth. “I think, looking ahead, we really, really have to decide what our priorities are for the city,” he said.
“And, in running a city, it’s going to be a tough couple of years money-wise, so there are going to be hard cuts, cuts that are going to come into things that are good things.”
Reporter News Editor Seth Daniel contributed to this report.
