BPI ANALYSIS: New City Hall Spending Freeze
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BPI ANALYSIS: New City Hall Spending Freeze5 takeaways from the Globe & Herald's new reporting about a leaked memo ordering a new spending freeze to go along with already-ordered "delayed hiring" from December
On Friday evening the Boston Globe and then the Boston Herald both published stories about a leaked memo to City Hall department heads. Here is the Herald’s lede:
The Globe provided a little more context in their lede:
The complete memo has not been published by either newspaper, but between the 2 articles there is enough information about the memo for some initial analysis, so BPI put together 5 takeaways from this reporting:
Before getting into those: the most important thing to takeaway from this reporting is that it is evidence City Hall is spending more than was approved in the FY26 budget passed last year. We already knew that Boston Public School was over-spending, which caused the $53M or 3% deficit in its FY26 budget. Looking at the drivers of BPS’ deficit, it seemed clear that some of the same issues would also affect City Hall, but that was guesswork. The memo reported on by the Globe and Herald is the first hard evidence that suspicion was true. This reporting is the latest warning that FY27 is going to be the toughest budget process that Boston has faced in some time. The budget is due out on April 8, so many of the questions raised by this latest reporting likely won’t be answered until the Council starts its FY27 budget process. 1. THE ACTIONS MAYOR WU ANNOUNCED IN DECEMBER, AND THAT CITY HALL ANNOUNCED THIS NEWLY REVEALED MEMO, SHOW GROWING CONCERN ABOUT OVER-SPENDING. Back in early December Mayor Wu wrote a letter to the City Council about FY26 assessed values that accompanied the City’s regular end-of-year request to the Council to set property tax rates for calendar year 2026 - read BPI’s analysis of that letter:
BPI’s analysis back then focused on what the letter said about assessed values, but this new memo highlights that the letter described new actions to cut City Hall spending in FY26. Here is that part from the Mayor’s letter in December:
The memo that the Globe and Herald reported about on Friday add new spending freezes. The Globe reports:
Those aren’t the only freezes. The Herald reports:
How much money are all these actions saving? It isn’t clear because there were no dollar figures in the Globe and Herald’s reporting on Friday. That follows a trend from December: the spending slow-down actions that Mayor Wu laid out in her December letter also have no dollar figures. 2. DEFICIT AND SPENDING FREEZE AT BOSTON PUBLIC SCHOOLS PROVIDE CLUES FOR DOLLAR FIGURES. While there were no dollar figures in Globe and Herald’s reporting about the memo or in Mayor Wu’s letter back in December, there is a good place to look for dollar figures: Boston Public Schools. The numbers behind BPS’ $53M FY26 deficit allow some back-of-the-envelope calculations to provide ballpark figures for what City Hall is facing. That is because, although it hadn’t been publicly disclosed at the time that Mayor Wu’s letter came out on December 3, 2025, Boston Public Schools had already implemented a similar freeze at Central Office on November 7, 2025. That spending freeze was part of BPS’ response to a $49M deficit that was publicly disclosed at the School Committee’s meeting on December 17. Then on January 16, 2026, a leaked memo from Superintendent Skipper revealed that BPS’ deficit had grown another $4M to $53M. READ MORE FROM BPI ABOUT BPS DEFICIT:
Here are BPS’ December and January numbers side-by-side:
The 2 highlighted lines are items that are shared between BPS and City Hall: a combined $35 million dollars in over-spending on healthcare and salary and other benefits. These allow some back of the envelope math. The City of Boston employs about 21,000 people, and about half, over 10,000 people, are employed by BPS. That means City Hall is likely facing roughly similar overspending on these same line items. The most important piece of evidence for this hypothesis? The new reporting cites healthcare as one factor driving City Hall’s decision to freeze spending. 3. THE MEMO & STATEMENT PROVIDE LITTLE DETAIL ON THE OVER-SPENDING, BUT RAISE A LOT OF QUESTIONS. What is creating the need for the new spending freeze? In the Globe and Herald’s reporting, between the memo and statement from the Mayor’s spokesperson there are 4 items that the City is over-spending on. This line from the memo describing the new over-spending is in both the Globe and Herald:
Just 2 of the over-spending factors in the memo were cited by the Mayor’s spokesperson, who also added 1 more:
So those 4 over-spending factors are: snow removal, public safety, healthcare, and energy. Here is what we know about each of those 4 items:
4. CITY LISTS REVENUE CHALLENGES ALONGSIDE OVER-SPENDING AS REASONS FOR SPENDING FREEZE. If you follow Boston’s budget process, you have heard that property taxes are an usually stable source of revenue for the City of Boston. Despite that stability, the lines from the memo and the spokesperson both include revenue alongside over-spending on the list of reasons that Boston needs to impose a spending freeze:
There was one additional line from the Mayor’s spokesperson in both the Herald and Globe’s article on this issue that stuck out:
All of that careful language stands out because for the last decade, Boston has been able to rely on revenue substantially outpacing the “target” mentioned by the Mayor’s spokesperson. Now a major one source of additional revenue is flagging, and the City faces the prospect of less revenue, highlighted by a recent lawsuit. Much of that extra, un-budgeted revenue has come from new growth being significantly higher than forecast: Boston has long under-estimated new growth Starting in FY23, City Hall appeared to stop making real forecasts  Unfortunately, after hitting historically high new growth - $122M - in FY24, in FY26 new growth dropped to $78M, a number last seen in 8 years ago in FY18. At a hearing back on December 8, 2025 Assessing Chief Nick Ariniello told the Council that new growth will be even lower in FY27 and FY28 - he is Speaker 3 & starts at the 1:10:22 mark:
The reason that this could be a factor in the City’s current fiscal crisis is because in the past City budget officials could use that revenue to plug over-spending, for example, from an particularly snowy winter or an unexpectedly expensive new CBA with a large public sector union. The other revenue issue is the lawsuit filed by the Pioneer New England Legal Foundation against the City of Boston over assessing practices - from the press release:
Even though there has been no update on the lawsuit since it was filed, it could already be costing the City money. That is the conclusion drawn from an email exchange between Boston’s Corporation Counsel Mike Firestone and PNELF that occurred back in December and was reported by the Boston Herald in January. Firestone wrote:
There hasn’t been any additional information since the article was published. For example, the City has not explained how the “discussed practice” might have affected the FY26 valuations sent to DOR. In addition to the potential impacts of the lawsuit, it also serves to highlight 2 other on-going processes that will cost Boston hundreds of millions of dollars:
CIP Assessed Property Values in Boston  5. THE EFFECTS OF WU’S “DELAYED HIRING” ORDER THAT HAS BEEN IN EFFECT SINCE DECEMBER ARE HARD TO SEE. Friday’s reporting on new spending freezes highlighted a little noticed part of Mayor Wu’s December 3, 2025 letter: her order “instructing the City’s personnel review committee to engage in controlled and delayed hiring.” Before getting into what exactly constitutues “delayed hiring,” we need to know the answer to a different question: what is the personnel review committee? The executive order from Mayor Menino that created the PRC back in 2008 provides a description:
The last time that the personnel review committee was on the Council agenda was this response to a 17F request in 2022. It appears that PRC’s make-up may have changed a bit: the Associate Director of the Office of Administration and Finance appears to have been switched out for the Budget Director. If that 2022 composition is still in place, that means that the PRC’s make-up is:
To really understand what this order means, those 3 folks who need to describe what changed about the PRC after the December 3 letter. Asking those questions will be important, because looking at the publicly available evidence, it is not clear what “delayed hiring” means. On one hand, there are 70 job postings from the City of Boston posted on LinkedIn, with posted dates ranging from a few days ago to 10 months old. On the other hand, according to this analysis from the Boston Herald published in January, though the City of Boston has created 301 new positions during Mayor Wu’s first term, the last time it created a new position was September 2024. The City has seen quite a few hires - some of which the City publicly announced, others that were not - since the delay was announced, including:
While there are a lot of unaswered questions, one thing is very clear: the Mayor shares very little information with the City Council, or the public, about the City’s on-going spending and hiring. Boston Policy Institute, Inc is working to improve the public conversation - help us by following BPI on YouTube, TikTok, |
