Boston’s next city budget is arriving under pressure from health costs, snow bills, and slower revenue growth
Boston MA – Mayor Michelle Wu previewed a tight FY27 budget shaped by rising health costs, snow and overtime bills, and slower revenue growth ahead of April 8 filing.
Boston is heading into its next budget season with unusually little room to maneuver.
Mayor Michelle Wu said on April 6 that she will propose a roughly $4.9 billion fiscal 2027 budget, up about 2% from the current year. That is a small increase for a city Boston’s size, and Wu described it as the lowest growth rate since the post-recession era. The practical question for residents is how City Hall plans to absorb fast-rising fixed costs without asking for a tax override, making broad layoffs, or using reserves in the upcoming FY27 proposal.
That matters because the pressure is not theoretical. Boston is already trying to close a nearly $50 million gap in the current fiscal year, with city officials tying that shortfall to snow removal, police overtime, and employee health insurance.
Why the squeeze got tighter
The biggest budget problem appears to be health care. Wu said a 20% health insurance rate hike is adding about $97 million in costs for city workers, Boston Public Schools, and the health commission. A recent City of Boston announcement on a new health-cost management agreement also said revenue growth heading into FY27 is projected at only about 1.5% to 2.5% over FY26, which helps explain why even a growing budget can still feel tight.
Snow and overtime are adding to the strain. Boston 25 reported that the current-year deficit is being driven by heavier-than-expected snow removal, police overtime, and health insurance spending. That is important context for FY27: the city is not building next year’s budget from a calm baseline.
There is also a timing distinction residents should watch closely. GBH reported that Wu’s FY27 proposal preview does not rely on reserves, while Boston 25 said reserve funds were still among the options being weighed for the separate FY26 shortfall. Those are related problems, but they are not the same budget decision.
What appears protected, and what does not
Wu has signaled that Boston is trying to protect core services rather than spread pain evenly everywhere. Boston Public Schools is still slated for an increase, even as the city overall holds spending growth down. Wu also pointed to housing, public health and safety, education, human services, quality of life, youth employment, and a modest increase for the Streets Cabinet as priorities.
What looks more exposed are discretionary programs, especially grants tied to nonprofit partners. WBUR reported that programs supporting re-entry, block parties, and food access could be affected. GBH also identified Age Strong and the Mayor’s Office of Housing as areas poised to see cuts.
That does not mean those services are finalized line by line. The full budget book had not yet been filed on April 6, so the preview is better understood as a map of pressure points than a complete cut list. Still, the early signal is clear: Boston is more likely to trim grants, delay hiring, and leave some vacancies open than announce sweeping citywide layoffs.
What happens next at City Hall
The formal budget filing is due by the second Wednesday in April, which falls on April 8, 2026. Under the city charter, the City Council then has until the second Wednesday in June to act.
The council’s FY2027 budget review page says the process will include about 35 public hearings, along with working sessions, livestream access, and public testimony opportunities. The review period runs from mid-April into June.
For homeowners, renters, workers, nonprofits, and neighborhood groups, the next phase is where the real impact should become clearer. The headline number is important, but the closer question is which local programs get crowded out when health insurance, snow costs, overtime, pensions, and debt service eat up more of the city’s limited growth. Boston is not talking about a dramatic fiscal collapse. It is talking about a budget year where quieter cuts may be the bigger story.
