Boston Mayor Wu says federal funding ‘chaos’ may result in metropolis layoffs, hiring freeze

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 finances she has proposed for subsequent fiscal yr.

Whereas blasting the “chaos” from the federal administration that she says is wreaking havoc on the town’s planning for the fiscal yr 2026 finances, Wu defended her determination to not reduce from the present fiscal yr’s finances, which grew by 8% in comparison with the 4.4% progress she’s proposing for subsequent yr’s spending plan.

“Over the past yr as we made the case for wanted aid for residents with regards to their tax burden, there have been many predictions that if we didn’t reduce the finances final yr … then the sky would fall and we’d be within the midst of super financial uncertainty,” Wu mentioned. “That has not been the case.”

Wu was referencing the talk round her stalled tax shift plan, which, if authorised by state lawmakers, would have allowed the town to extend industrial tax charges to offer property tax aid for householders.

The mayor mentioned progress final yr was largely as a consequence of newly settled union contracts, and that the town made the fitting determination by resisting calls to chop the finances and pull from its reserve funds, given the uncertainty round federal funding this yr.

“We resisted all these, figuring out that essentially the most accountable actions had been to observe and make it possible for we’d be ready for true financial uncertainty and potential monetary disaster,” Wu mentioned Wednesday at a Metropolis Corridor finances breakfast. “Unexpectedly, we’re on this second now as a consequence of actions from this federal administration.

“However I need to be clear that the finances we’re proposing this yr is totally different than the one which we had proposed final yr as a result of the bigger macro-economic state of affairs has shifted.”

Whereas Wu insisted that her administration’s finances 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 dealing with troublesome selections.

The town has by no means made a mid-year finances reduce, Wu mentioned, but when a few of its $300 million in anticipated federal funding doesn’t materialize, that would change.

“We might properly get to the purpose the place we have now to be contemplating layoffs and hiring freezes,” Wu mentioned.

A hiring freeze can be extra drastic than the method the town is at present taking, by not filling positions which were vacant for greater than a yr and growing wage financial savings “the place applicable,” Wu and her staff mentioned.

Such an method has resulted in a diminished general headcount within the FY26 finances of practically 500 positions, the mayor mentioned.

Different cuts embrace a discount in discretionary non-personnel objects like gear and provides, Wu mentioned.

“It is a shared sacrifice throughout all of our departments to make sure that we are able to maintain doing the work that has essentially the most influence for our residents and maintain assembly the wants that we all know are rising in neighborhood,” Wu mentioned.

Nonetheless, the mayor mentioned the finances’s proposed 4.4% progress is in keeping 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 “skilled any main disruptions this yr” by way of a lack of anticipated federal funding.

She mentioned, nevertheless, that as these funds are available all year long, the town will likely be monitoring the finances, and doubtlessly 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 aid grant funding for the Boston Public Colleges that was canceled, together with a growth pipeline grant, though the courts have paused the latter cancellation.

“We, in our metropolis finances, rely yearly on $300 million of federal funding that thus far has been comparatively legally protected, however we all know that proper now, the regulation will not be seen as a boundary both, and so we have to be ready for the worst in each case,” Wu mentioned at Wednesday’s finances presentation.

Gregory Maynard, government director of the Boston Coverage Institute, mentioned that the mayor was mistakenly attributing the town’s determination to tighten its budgetary belt this yr to the “chaos in Washington, D.C.”

In actuality, he mentioned, the decrease price of progress on this yr’s spending plan is definitely pushed by falling workplace values.