Boston Mayor Michelle Wu mentioned the town could also be compelled to make layoffs and implement a hiring freeze if anticipated federal funding doesn’t materialize for the $4.8 billion funds she has proposed for subsequent fiscal 12 months.
Whereas blasting the “chaos” from the federal administration that she says is wreaking havoc on the town’s planning for the fiscal 12 months 2026 funds, Wu defended her resolution to not minimize from the present fiscal 12 months’s funds, which grew by 8% in comparison with the 4.4% progress she’s proposing for subsequent 12 months’s spending plan.
“Over the last year as we made the case for needed relief for residents when it comes to their tax burden, there were many predictions that if we did not cut the budget last year … then the sky would fall and we would be in the midst of tremendous economic uncertainty,” Wu mentioned. “That has not been the case.”
Wu was referencing the controversy round her stalled tax shift plan, which, if permitted by state lawmakers, would have allowed the town to extend business tax charges to supply property tax reduction for householders.
The mayor mentioned progress final 12 months was largely as a result of newly settled union contracts, and that the town made the appropriate resolution by resisting calls to chop the funds and pull from its reserve funds, given the uncertainty round federal funding this 12 months.
“We resisted all those, knowing that the most responsible actions were to monitor and make sure that we’d be prepared for true economic uncertainty and potential financial crisis,” Wu mentioned Wednesday at a Metropolis Corridor funds breakfast. “Unexpectedly, we’re on this second now as a result of actions from this federal administration.
“But I want to be clear that the budget we’re proposing this year is different than the one that we had proposed last year because the larger macro-economic situation has shifted.”
Whereas Wu insisted that her administration’s funds planning in previous years has been essential to making sure the town’s monetary well being is powerful sufficient to climate the present federal uncertainty, she mentioned the town should be going through tough selections.
Town has by no means made a mid-year funds minimize, Wu mentioned, but when a few of its $300 million in anticipated federal funding doesn’t materialize, that would change.
“We may well get to the point where we have to be considering layoffs and hiring freezes,” Wu mentioned.
A hiring freeze could be extra drastic than the method the town is at present taking, by not filling positions which have been vacant for greater than a 12 months and rising wage financial savings “where appropriate,” Wu and her crew mentioned.
Such an method has resulted in a diminished total headcount within the FY26 funds of almost 500 positions, the mayor mentioned.
Different cuts embody a discount in discretionary non-personnel objects like gear and provides, Wu mentioned.
“This is a shared sacrifice across all of our departments to ensure that we can keep doing the work that has the most impact for our residents and keep meeting the needs that we know are growing in community,” Wu mentioned.
Nonetheless, the mayor mentioned the funds’s proposed 4.4% progress is in step with the speed of inflation and core metropolis departments are rising by 1.7%.
Ashley Groffenberger, the town’s chief monetary officer, mentioned Boston hasn’t “experienced any major disruptions this year” by way of a lack of anticipated federal funding.
She mentioned, nevertheless, that as these funds are available all year long, the town will probably be monitoring the funds, and probably tweaking it down the road, ought to there be any fiscal modifications after the Metropolis Council approves the spending plan in late June.
Wu, who has tangled with the Trump administration over immigration and different insurance policies, informed the Herald Monday that the town is already difficult potential federal funding cuts in courtroom. She mentioned there was some unspent COVID emergency reduction grant funding for the Boston Public Faculties that was canceled, together with a growth pipeline grant, though the courts have paused the latter cancellation.
“We, in our city budget, rely every year on $300 million of federal funding that so far has been relatively legally protected, but we know that right now, the law is not seen as a boundary either, and so we need to be prepared for the worst in every case,” Wu mentioned at Wednesday’s funds presentation.
Gregory Maynard, govt director of the Boston Coverage Institute, mentioned that the mayor was mistakenly attributing the town’s resolution to tighten its budgetary belt this 12 months to the “chaos in Washington, D.C.”
In actuality, he mentioned, the decrease fee of progress on this 12 months’s spending plan is definitely pushed by falling workplace values.
“With Boston’s office vacancies still at historic highs, and more buildings selling for fractions of their pre-COVID value,” Maynard mentioned, “this city’s leaders need to take urgent action or face even more serious fiscal challenges in the years ahead.”
Wu’s mayoral opponent Josh Kraft, son of the billionaire New England Patriots proprietor Robert Kraft and longtime philanthropist, issued a press release after the occasion that targeted on the town’s $4.5 billion five-year capital plan proposal for FY26-30.
“Budgets are value statements,” Kraft mentioned, “so it is telling that in her capital budget, Mayor Wu has made funding for White Stadium a priority over funding for Madison Park High School and other new school construction.”
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