FY27 Operating Budget
Learn about how the Operating Budget supports various services provided by the City.
The FY27 Recommended Operating Budget totals $4.9 billion and represents an increase of $99 million or 2.1% over FY26.
- 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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Still have questions? Contact:
Budget
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1 City Hall Square
Room 813Boston, MA 02201-2037
Operating Budget Overall Spending
Operating Budget Total Spending
- The FY27 operating budget shows an increase of $99 million or 2.1% over FY26.
- The largest area of growth in the operating budget is health insurance, over $97 million spread across the central City appropriation, the Boston Public Health Commission, and the Boston Public Schools. The latter appropriation is also growing due to inflationary costs in areas such as facilities, transportation, and special education.
- When adjusted for the extraordinary growth of health insurance, appropriations to City Departments are decreasing by $20.4M, or -1.3%, through targeted reductions. Though it includes year-over-year decreases, the FY27 budget protects core city services and continues to fund key priorities.
- Further moderating the growth of the City's budget are changes in fixed costs, namely the optimization of the pension schedule, saving $24.7 million, and a restructuring of the City's debt schedule, saving another $13.1 million.
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 FY25 amount is actual expenditures. The FY26 and FY27 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 7.4% over FY26. Non-recurring revenues compose only 1% of the FY27 budget.
Similar to FY26, FY27 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.
Learn more about the budget
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Still have questions? Contact:
Budget
-
1 City Hall Square
Room 813Boston, MA 02201-2037
