FY26 Operating Budget

Learn about how the Operating Budget supports various services provided by the City.

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The FY26 Recommended Operating Budget totals $4.8 billion and represents an increase of $96 million or 2% ($206 million or 4.4% adjusted) over FY25.

The operating budget is an approved annual spending plan allotted to both City departments and central budgets. The budget supports the cost of the day-to-day operations of City government, such as public education and public safety.
The budget also includes the yearly mandatory payments required to support long-term commitments for items like retirement pensions and debt service related to the Capital Plan.
The operating budget is funded primarily based on an estimate of annual recurring revenues.

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Operating Budget Overall Spending

Operating Budget Total Spending

The FY26 budget reflects an increase of $96 million, or 2%, over the FY25 budget (adjusted for the one time FY25 appropriation for the Housing Accelerator Fund, it's a $206 million or 4.4% increase).
Of this year's growth, 26% is dedicated to education, including Boston Public Schools (BPS) and Charter School Tuition Assessment. An additional 14% of the increase is for contractual growth in basic city services.
Long term financial obligations take up 41% of growth. This funds increases in pension payments and debt service related to the City's capital plan.
Equitable employment costs make up 18% of the increase. FY26 funds an innovative wage pattern that supports lower wage employees, as well as a significant increase in Health Insurance costs.

Expenditures

Operating Budget spending can be broken down into six main categories:

Personnel Services costs cover items such as employee salaries, overtime, and benefits.
Contractual Services represents services procured to support departmental operations such as telecommunications, utilities, and other operational services.
Supplies and Materials covers costs such as gasoline for vehicles, office supplies, and other general supplies to support departmental operations.

Current Charges include required expenses for things like health insurance, bonds, and health liability expenses.
Equipment costs include purchases like computers, financing costs for vehicles, and information technology and telecommunication equipment.
Other costs include large items like employee pensions and capital bond debt service and charges assessed by the Commonwealth of Massachusetts.

Overall Spending

The chart to the left shows expenditures by area over three years.

The FY24 amount is actual expenditures. The FY25 and FY26 amounts are budgeted.

Explore Spending

Departmental Spending

Select a department to see how its budget has changed over time.

Revenue Overview

The City's revenue comes from: Property Tax, State Aid, Local Revenue (including Department Revenue and Excise Taxes), and Non-Recurring revenue.

The property tax levy has always been the City’s largest and most dependable source of recurring revenue. Over the past two decades, the City’s revenue structure has shifted significantly towards property tax, while State Aid has decreased as a share of the budget. Local receipts including excises, licenses and other departmental revenues continue to reflect the strength and vitality of the city economy and are budgeted to grow 7.8% over FY25. Non-recurring revenues compose only 1% of the FY26 budget.

Unlike FY25, FY26 does not include appropriations to the Housing Accelerator Fund enacted in January 2025. A more detailed discussion of City revenues is provided in the Revenue Estimates and Analysis chapter of the budget book.