Press Release: 4/15/2026

FY27 Budget Expected to Rise 2.1% Amid Low Revenue Growth

 

BY  BMRB · APRIL 14, 2026

Hard Decisions as 519.8 FTEs Eliminated and Departments Experience Cuts 

Budget season in the City of Boston began on April 8 with Mayor Michelle Wu’s release of her FY27 recommended budget. The $4.94B FY27 operating budget represents a 2.1% increase from FY26. The slowdown in revenue growth limited FY27 budget growth, with property taxes increasing at their slowest rate since FY98. Nevertheless, property taxes grew as a share of overall revenues from FY26, due in large part to steep declines in other revenues, particularly from interest on investments and building permits.

In addition to cuts across many departments, the City restructured pension and debt service payments, reducing spending in these categories by $24.7M and $13.1M, respectively. A reduction of 519.8 full-time equivalents (FTEs) does not translate into a proportionate decrease in the FY27 operating budget. Health insurance and salary increases negotiated in recent collective bargaining agreements were major drivers of growth in this budget. The increase of $92.0M in FY27 spending on health insurance represents a 23.9% increase from FY26 to FY27. Without health insurance costs, the BPS budget is still growing 2.7% ($40.1M), a notable trend in a year in which the total budget for all other departments is shrinking by 1.0% (-$16.4M). Alongside the operating budget, the Mayor also released a $4.44B 5-year capital plan, a decrease of 1.0% (-$43.2M) from the previous capital plan.

To learn more about key FY27 budget issues and Boston’s policy options, read the full report here: