FY27 BUDGET SEASON: Preview today’s $4.9B Operating & $4.4B Capital Budgets hearings
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FY27 BUDGET SEASON: Preview today’s $4.9B Operating & $4.4B Capital Budgets hearingsHearings on Boston's FY27 Operating Budget and Capital Budget kick off the start of Council budget hearings; BPI has 2 issues to watch for each hearing, PLUS budget numbers & questions
The Council is holding its first budget hearing of 2026 with a complete FY27 budget today: those hearings will continue into late May, then the Council is required to take its first budget vote by June 10, and a final budget needs to be approved before FY27 starts on July 1 - find the Council’s schedule here. This week the Council is holding budget hearings on the $4.9B Operating Budget, the $4.4B Capital Budget, and the $1.7B Boston Public School (BPS) Budget. The BPS Budget is included in the larger Operating Budget, but because of its size, and the fact that it has its own separate budget process - it was offered to the Boston School Committee back on February 4 and approved on March 25 - it is treated as effectively a third stand-alone budget. This preview is for today’s hearings, the 10 AM “Operating Overview” and the 2 PM “Capital Overview.” A preview email for the BPS hearing will go out on Thursday morning - look for that! Read the whole FY27 Budget Book Before getting into the numbers, there 2 issues that need to be discussed at the Operating Budget hearing, and 2 that need to be discussed at the Capital Budget hearing:
In this FY27 budget hearing preview, BPI will include:
OPERATING BUDGET - TUESDAY, APRIL 14, 10 AM IANNELLA CHAMBER According to the description in the public notice: The focus of this hearing is an overview of the FY27 Operating Budget. This one is a little unusual because the Operating Budget is most of the FY27 Budget Book. WHERE DO I FIND IT IN THE FY27 BUDGET BOOK? The “Operating Budget” executive summary can be found p. 34-79, and the “Revenue Estimates and Analysis can be found p. 80-103. FY27 vs FY26 BY THE NUMBERS $4,942.4M in FY27 vs $4,843.0M in FY26, a $99.4M or 2.1% increase - p. 37 The FY26 number differs a little from the number in the final budget last year: $4,838.3M - find that on p. 34 of the FY26 Budget Book. FROM THE MAYOR’S LETTER Mayor Wu’s letter discusses the overall budget, and a few paragraphs later makes a claim about the decrease:
The letter doesn’t say how much that 1.3% is, but the FY27 Budget Book does (p. 20): $20.4M. Doing the math, $20.4M is 1.3% of $1,569.2M, and unfortunately for the public, there is no table in the Budget Book that actually shows which line items City budget writers picked in order to create this statistic. Mayor Wu’s letter claims there are $37.8M worth of savings in Fixed Costs:
The Budget Book goes into more detail on those savings (p. 45) and reveals that “the City is on a schedule that targets reducing its pension liability by 2028.” However, the 2028 goal is relatively new: as recently as FY25 - and going all the way back to at least FY21 - the goal year was 2027. Starting last year in FY26 the City moved the goal forward a year to 2028. The letter also claims $10.6M in healthcare spending savings, which is a small mitigation on an enormous increase:
This $97.3M increase is not spread out equally across the different health insurance line items:
WHAT BPI IS WATCHING FOR In addition to the revenue and health care issues laid out at the top of this preview, there are 3 other issues that BPI is watching for. HOW MUCH OF THE FY27 OPERATING BUDGET IS FOR PAY INCREASES FROM CONTRACTS SETTLED IN CALENDAR YEAR 2025? For example, the contract settled with the Boston Teachers Union in April 2025 was estimated to cost $86.3M in FY27 over the prior contract, part of the contract’s $181M increase over 3 years. That is more than the total increase in Boston Public Schools’ budget in FY27, meaning that at least some of the budget changes made in this year’s budget are being driven by that pay increase. Estimates like this are made public for all of the Boston Public Schools contracts, and presumably similar analysis is done in-house for the City Hall contracts, since the City also produces dollars-over-contract-years totals. The City should be able to find all those estimates and add them together.
There were also other contracts settled in 2025 as well, for example the Boston Firefighters - Local 718, contract, which was estimated at $90M increase over 4 years and the Boston Police Patrolman contract, which was estimated at $6.7M for 1 year. These figures are important because the new contracts have a huge impact on City budgets. At BPS, hundreds of teachers and paraprofessionals covered by the 2025 contract are being laid off, even as the line items for many salary categories increase due to the large pay raises negotiated between the City and BTU. HAS THE CITY ELIMINATED 785 OR 104 VACANT POSITIONS IN FY26 and FY27? There is disagreement between how many vacant positions Mayor Wu says she has eliminated, and how many vacant positions the City’s own Budget Books say have been eliminated. Here is Mayor Wu at the FY27 budget presentation last week - she is Speaker 0 and starts at the 50:56 mark:
The FY27 Budget Book provides different numbers for the number of vacant positions eliminated: 47 in FY26 and 57 in FY27. City budget officials need to explain how the Mayor got to 500 “FTE equivalent cuts” in the FY26 budget, but the Budget Book reports “47 long-term vacant positions were eliminated in the FY26 budget.” (p. 66) They should also explain 285 vs “Departments eliminated 57 long-term vacant positions in the FY27 budget process.” (p. 69) HOW MANY OF THE 71.9 FTE POSITIONS BEING ELIMINATED IN THE PUBLIC SAFETY CABINET ARE CIVILIANS? At the FY27 budget presentation, CFO Ashley Groffenberger said that the City was “strategically reducing some civilian positions in our public safety departments” - she is Speaker 4 & starts at the 22:56 mark. Reading the explanation of the FTE changes in the Public Safety Cabinet on p. 69, it appears that 29.3 of the FTEs in that cabinet are not affected by “class timing” issues at the Fire Department. The explanation does not explain what is behind the 27.8 FTE reduction at the Police Department beyond to note that “Class timing is not at play” and that “the department has seen higher than expected civilian and sworn attrition.” CAPITAL BUDGET - TUESDAY, APRIL 14, 2 PM IANNELLA CHAMBER According to the description in the public notice: The focus of this hearing is an overview of the FY27 Capital Budget. WHERE DO I FIND IT IN THE FY27 BUDGET BOOK? The “Capital Planning” executive summary can be found p. 116-127. The “FY27-FY31 Capital Plan” is detailed in Volume IV of the FY27 Budget Book - p. 895-1102. FY27 vs FY26 BY THE NUMBERS Capital spending is a little different than the Operating Budget, but there are a few really interesting comparisons - find the FY26 table on p. 121 of the FY26 Budget Book:
That 1% decrease doesn’t tell the whole story however: these FY27 and FY26 capital budgets are vastly different.
In addition to spending less of its own “non-bond revenue” in FY27, Boston is also obscuring where that money is coming from. Last year - and in prior years - sources like the Parking Meter Fund, Surplus Property Fund, and Boston Planning and Development Agency were broken out in a table. This year, Boston eliminated that table, so the specific source of City funds is not described.  Find the FY26 table on p. 124 in , the FY25 table on p. 97, the FY24 table on p. 103, and the FY23 table on p. 98 FROM THE MAYOR’S LETTER This year’s letter includes a number of mentions of capital projects currently on-going or recently completed, but unlike previous years, there are no new construction announcements in this letter. Here are a number of examples:
WHAT BPI IS WATCHING FOR Are the ~$400M in loan orders requested in Dockets #0738 and #0739 in the “Capital Project Financing” chart on p. 120? What is driving the reduction in City-provided “non-bond revenue”? This year there is just $189.9M in City-provided “non-bond revenue” which is the lowest amount being spent in Mayor Wu’s tenure. This money comes from the Parking Meter Fund, which the City is also tapping for the Operating Budget this year, and from the Surplus Property Fund. Why is a break-out of the sources of City-provided “non-bond revenue” not included in this year’s Budget Book? In all of the previous Budget Books, there is a table titled “Other Funds Summary” which shows where the other funds, including City funds, are coming from. Those charts from FY26 to FY23 are shown above. In this year’s budget book the “Other Funds Summary” does not break out the different City sources - Parking Meter Fund, Surplus Property Fund, Utility Fund, etc - and instead bundles them all together as “City Funds”. Is Boston planning on a permanently lower amount of borrowing? This year’s $394.6M in capital spending is the least of Mayor Wu’s tenure in office: $458.4M in FY26; $420.9M in FY25; $992.9M in FY24; and $682.1M in FY23. That is not the only number that is lower this year: so is existing authorizations and non-bond revenue. Borrowing less money for capital projects means less of the Operating Budget needs to be devoted to debt service. Is Boston planning on submitting a school project to MSBA’s “Core Program” in 2026? The deadline for MSBA’s “core program” is this Friday, April 17. Is Boston planning on building new schools outside of MSBA? Based on BPI’s review of BPS’ Capital Budget (p. 928-949) the only 2 non-MSBA “new school” building projects in the budget are the Allston Elementary School Design (p. 929) and the Blackstone School Study (p. 933) neither of which has any money budgeted for FY27. The budgets for both the Allston and Blackstone projects declined precipitously in FY27 vs FY26:
Can the City provide more detail on the big jump in spending planned for the “Implementation of Long-Term Facilities Plan at Several School” capital project (p. 939)? Last year the project totaled just $124M and this year the project totals $665M. Looking at authorizations in FY27 vs FY26:
Based on what the City has released to date about the “Long-Term Facilities Plan” it is not clear what any of this money is for - check out the district’s website. 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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