BPI breaksdown Boston's FY27 Budget on BNN's "Talk of the Neighborhoods"
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BPI breaksdown Boston's FY27 Budget on BNN's "Talk of the Neighborhoods"BPI's executive director Gregory Maynard sat down with guest host Mary Tamer on BNN's weekly live interview show on Thursday, April 9, 2026
BPI’s executive director Gregory Maynard joined guest host Mary Tamer on “Talk of the Neighborhoods,” Boston Neighborhood Network’s weekly live interview show, to talk about Boston’s FY27 budget on Thursday, April 9, 2026. Tamer and Maynard unpack what is the FY27 budget, and what is driving budget decision-making from layoffs at Boston Public Schools, to real estate development, to the possibility of a Proposition 2.5 override in Boston. Watch the whole video above, or read a transcript of the conversation below! TRANSCRIPT Mary Tamer: Thanks for staying with us. We are now joined by Greg Maynard of the Boston Policy Institute. Greg, thank you so much for being here. There’s so much to talk about, as always. We’ve heard in recent weeks — and I know the mayor just released her $4.9 billion budget — that Boston Public Schools is facing a $53 million shortfall for this current school year. And then the city, a couple weeks ago, said they’re close to a $50 million shortfall on their side for this current fiscal year as well. What’s going on? Gregory Maynard: The fiscal crisis that the Boston Policy Institute has been talking about for a couple of years is here. What we’re seeing in FY26 is that Boston has a habit of using unbudgeted revenue to pay for unbudgeted spending. Basically, the city raises more money than it expects to in the budget and uses that to pay for overages on police overtime or snow removal. But in FY26, there were far more overspending issues, particularly around health care — a major driver on both the BPS side and the city side. There was just too much need and not enough unbudgeted revenue, largely because construction in the city has stalled out. And it’s not clear that the FY27 budget addresses any of the issues that created this $100 million-plus deficit in FY26. Mary Tamer: When the mayor released her budget the other day, were you surprised? Because on March 25th, the school committee passed a $1.7 billion budget for next year with layoffs of somewhere between 300 and 400 positions, mostly from the teaching side — even though we know hiring has been particularly heavy on the administrative side. There are a lot of questions and families that aren’t happy about losing teachers. Are you surprised that, given the financial outlook right now for Boston, we’re not seeing any talk of layoffs or staffing cuts on the city side? Gregory Maynard: Yes, it did look like there were going to be some layoffs. There was language around the GLP-1 fight between the public employees committee and the mayor about “minimizing layoffs” — and you can only minimize something that is actually happening. So I thought there would be layoffs. There aren’t. One of the things that was really interesting about Mayor Wu’s speech is she spent a lot of time talking about how BPS’s budget was actually going up and that this represented an investment in BPS. That just rang false when they’re cutting 400 mostly classroom teachers and paraprofessionals. It’s not technically layoffs in the BPS sense, but you’re seeing 300 to 400 positions eliminated on the school side while on the city side you’re not seeing anything. The city said they were eliminating 285 vacant positions, which brings the total to almost 800 vacant positions eliminated over the last two years. This budget just doesn’t clearly solve those FY26 deficit issues. Mary Tamer: I think one of the surprising things is we heard a lot of explanations — snow removal, for instance. Yes, we had a lot of snow this year, but we’re Boston, and snow is not something that doesn’t happen here. The other factor that’s been cited is increasing health care costs. A lot of folks are talking about GLP-1s — those are shots used for diabetes but also successfully used for weight loss. But we know what health care costs. Cities have that information in advance, right? Premium increases of 15 or 20 percent — that’s not typically a last-minute, secretive issue, is it? Gregory Maynard: That’s one of the big things we haven’t seen enough information about — exactly what happened with health care costs on the city side. What we heard at the beginning of March from Boston Public Schools CFO David Bloom is that he started getting worried about health care costs last summer — the summer of 2025 — and that it became clear they had real problems in September and October. That’s why they froze central office hiring and spending on November 7th, 2025. So this is something the city has been aware of for some time. In the FY27 budget, spending on health care is going up almost $100 million across BPS and City Hall. But even then, we saw BPS add $14 million more to the health insurance line item the very day the BPS budget was voted on by the school committee — which indicates the city had to redo its math over the course of just February and March for that March 25th vote. There really needs to be a lot more information about what exactly happened with health care. Mary Tamer: It seems to me the elephant in the room — whether on the school side or the city side — is that at the same time we’re seeing dramatic unenrollment in Boston Public Schools (enrollment has been declining for 15 years now), staffing continues to climb. That’s a huge driver not only of staffing costs but health care costs. And the same is true on the city side. What is the percentage increase in staffing at City Hall now versus four or five years ago? It’s gone up quite a bit. Gregory Maynard: City Hall staff is larger than it was when Mayor Wu took office. Looking at the numbers, staffing as of January 1, 2027 is expected to be about the same as it was on January 1, 2025. But the FY25 budget went up 8%, so FY25 was not a lean year by any means. On the staffing front, it really doesn’t seem like the city is getting its arms around the issue. Especially when you compare the lack of steps being taken in FY27 to what Mayor Menino did in FY09 and FY10 — the last time we saw deficits and budget growth this low. Mayor Wu is taking far less serious steps than Menino took. Mary Tamer: Can you mention what steps Mayor Menino took? That was about 15 years ago now. Gregory Maynard: Mayor Menino did two things: he laid off staff, and he asked public sector unions to defer pay increases in order to save the city money. Now, the reason Mayor Wu might not be doing that could be — and City Hall hasn’t talked about this — BPI’s expectation that what we’re seeing is not a temporary crisis like 2009 and 2010. What we’re seeing is the new normal for the city of Boston. You have persistently high office vacancy rates, new growth continuing to fall, and that’s expected to continue for the next few years. So rather than having one or two years of slow growth like during the Great Recession, this may just be how things are going to be. Some of those crisis actions that you might normally take — the city is maybe trying to keep a few more options available for later. Mary Tamer: And your 2024 report seems to have been a harbinger of what we’re seeing now. Can you say a little bit about how that report came about and what it predicted? Gregory Maynard: Sure. BPI put out a report called “The Fiscal Fallout of Boston’s Empty Offices,” produced with the Center for State Policy Analysis at Tufts University, headed by Evan Horowitz. What we were seeing was really high office vacancy rates — everyone remembers that during COVID, everyone started working from home and foot traffic in the city dropped dramatically. Boston is a particularly property-tax-dependent city. In fact, it’s the most property-tax-dependent big city in America — over 70% of the city’s budget comes from property taxes, and that’s risen enormously over the last 20 years. The city’s budget was built on the back of the enormous office building boom from the early 2000s through COVID. Our question was: if office vacancy rates stay elevated, what happens to the city’s budget? Our conclusion was that the city would see a $1.2 to $1.5 billion loss in commercial property tax revenue over the next five years — roughly 2024 to 2029. And that’s exactly what you’re seeing. With office values collapsing, residential values plateauing, and very little new construction, you get budgets like FY27 that grow very little. Mary Tamer: So how worried should homeowners be? Boston homeowners have seen significant tax increases in recent years. And for seniors in particular — I live in West Roxbury, which has more seniors living on their own than any other neighborhood in Boston — what can people expect, given that this seems to be the new normal? Gregory Maynard: There’s been a lot of talk about Mayor Wu saying she won’t pursue a Prop 2.5 override. But what’s really important to understand is that even without one, Boston residential property owners are going to see their taxes go up far more every year for the next several years than people in communities that are having Prop 2.5 overrides — because Boston is so dependent on commercial property values. Commercial property makes up only a third of all assessed value in the city, but it pays two-thirds of the taxes. As those commercial values fall, the city still needs to collect the same amount of revenue — it’s just going to collect it from different people: residential property owners, homeowners. So without any vote, Boston residents will continue to see their taxes rise much faster than people in other communities who can vote on their tax rate. Mary Tamer: I know Arlington just passed a nearly $15 million Prop 2.5 override to prevent school layoffs. And I understand there’s actually a record number of overrides this year? Gregory Maynard: Yes, there was a record number of overrides last year and there’s another record number this year, and a lot of them are operational overrides — just to pay the regular bills for the town. Mary Tamer: Do you think a Prop 2.5 override ballot question would be successful in Boston? Gregory Maynard: Large cities in Massachusetts don’t do Prop 2.5 overrides. Somerville had one 10 years ago to build a new high school, and Lowell built a new high school without needing one. Talking about this for Boston is a bit silly. The fact that it’s being discussed as a point of contention indicates more about a lack of understanding of how Boston’s budget works than it does about Mayor Wu’s fiscal management. And to put a finer point on it: if Boston voted for a Prop 2.5 override, that would mean taxes going up on top of the already-happening shift of the tax burden from commercial to residential property owners. It would just pile on to what’s already occurring. The whole Prop 2.5 override conversation in a city the size of Boston is far-fetched and, honestly, a distraction from a very serious fiscal crisis. Mary Tamer: One recent Globe story caught my attention — it was about a Back Bay mansion that recently sold for $25 million, but the assessed value was significantly lower, maybe around $8 million. Years ago there was often a big discrepancy between assessed value and purchase price, but many of us who’ve been here a long time are finding our assessed values are now right on the nose of what our homes are worth. Why isn’t that happening for a Back Bay mansion? Gregory Maynard: BPI actually did a short report on this last year called “Boston’s Mansion Markdown.” What’s happening is called vertical inequity. If you’re a single-family homeowner in West Roxbury, there are lots of comparable homes on similar streets — similar square footage, similar character. It’s relatively easy for the assessing department to determine a value when there are many comps. The problem is that once you get above the $2 to $3 million range, there aren’t that many homes. When you’re talking about a $25 million home, or penthouses in new residential towers, there are so few of those being sold that there’s no way to compare them to other properties. As a result, they get significantly under-assessed. This is a problem not just in Boston — it’s a problem everywhere that collects property taxes, and it’s a persistent one. The Lincoln Land Institute in Cambridge spends a lot of time trying to figure it out. There are some things the city can do, and the consensus is that Boston actually has a pretty good assessing department on this front — the city’s doing about everything it can. There’s just not much more it can do. Mary Tamer: You mentioned earlier a significant slowdown in construction — housing, lab space, all of it. At a time when all we hear about is the desperate need for more housing, why isn’t it happening? Gregory Maynard: Boston’s new growth peaked in FY24 at about $122 million in new tax revenue, though that figure is a little misleading because it reflects construction that actually happened back in 2022 — Mayor Wu’s first year in office. Since then, the city has seen a big slowdown. The Boston side of Suffolk Downs, for instance, which was approved through Article 80 at the BPDA six years ago in September 2020, hasn’t seen any construction, while the Revere side is actively being built. Dot Bay City at the old Expo Convention Center, approved in September 2023, is now selling off a piece of its approved project. There are obviously issues around tariffs and lending costs. But the city also increased its inclusionary zoning requirements from 13% to 20%. What that means is that for any development of seven or more units, 17% must be affordable and 3% must be deeply affordable — and increasing that requirement at a time when other construction costs were also rising made projects harder to pencil out. The Suffolk Downs situation is a perfect illustration: Revere doesn’t have inclusionary zoning, so units are being built on that side of the site but not on the Boston side. On top of that, the city increased linkage fees on offices by 50% and on lab space by 100%, at a time of historically high office and lab vacancy. That discourages developers from building here. And meanwhile, it’s become easier to build in the rest of Massachusetts. Governor Healy signed the ADU law in August 2024, regulations were out by February 2025, and now accessory dwelling units are legal in 350 cities and towns. The notable exception is Boston. Boston does not have the same rules as the rest of Massachusetts, making it far harder to build ADUs here. Mary Tamer: Why is that? I’m sure there are plenty of people who would love to add a mother-in-law apartment or a unit for their kid. Why don’t we have that? Gregory Maynard: It’s not entirely clear. Boston has had an ADU pilot program since 2017, so the city’s been working on this for almost a decade. There are some ADU rules in Roxbury and Mattapan, but they’re not as expansive as the state rules being enforced everywhere else. Under this administration, we’ve seen a lot of rhetoric around planning changes and zoning reform, but those zoning reforms haven’t materialized. Cambridge and Somerville have legalized triple-deckers citywide, abolished parking minimums citywide. Boston hasn’t done those things. In a hearing back in December, planning officials said the city has no plans to abolish parking minimums, legalize triple-deckers, or legalize ADUs. There’s just no appetite at City Hall for the wide-ranging zoning reforms that other communities are embracing to build more housing. Mary Tamer: Is this something that rests with the mayor, or with the city council — or both? Gregory Maynard: This rests with the mayor. Boston is a strong-mayor system. The city is run by the mayor, and the city council plays some role, but all four of Mayor Wu’s budgets have passed with about 99% of what she proposed becoming law. On zoning specifically, the mayor appoints the ZBA, the Zoning Commission, the BPDA board, and hires everyone in the planning department — these are her responsibilities and her bailiwick. Mary Tamer: And it’s progressive policy, which seems puzzling. This is the kind of reform that would help the population and help the city. Gregory Maynard: Cambridge and Somerville are certainly not conservative places, and they’ve been able to enact those reforms. Mary Tamer: We’re down to our last couple of minutes. If you could wave a magic wand, Greg, how do we begin to address the budget crisis we’re in now and could be facing for years to come? Gregory Maynard: I think the most important thing is that the city of Boston really needs to focus on what it’s going to do about downtown. Newmark Real Estate Group recently put out their Q4 2025 office analysis, and they noted that after 14 straight quarters of rising vacancy rates, it had finally declined slightly — but the rate is still higher at the end of 2025 than it was at the beginning of 2025. So much more effort, energy, and fresh ideas are needed around downtown Boston. The World Cup is coming up, and there’s a lot happening this summer with the 250th anniversary and the Tall Ships — a real opportunity to pilot some new ideas. We’ve heard a lot of talk about closing streets, social drinking licenses, and revitalizing Quincy Market, but the reality is none of that has actually happened. Much more needs to be done downtown, because Boston’s budget rests mostly on the back of commercial real estate. Until the city figures out what to do about that, everything else is going to be very hard. Mary Tamer: All right, Greg, we’re out of time, but thank you so much for joining us. Always a pleasure. Please be back next week when Joe Heisler will be returning from his vacation. We hope everyone has a great weekend ahead. Good night. Boston Policy Institute, Inc is working to improve the public conversation - help us by following BPI on YouTube, TikTok, Facebook, Instagram, Threads, Twitter, and LinkedIn.
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