Boston's first-quarter budget check: on track overall, but overtime, fuel, utilities and court judgments are running hot

Three months into the fiscal year, Boston's $4.94 billion operating budget is broadly on track, the Wu administration told the City Council on Monday. But its first-quarter report flags several accounts that could run over before June. Overspending in one area has to be covered somewhere else, which can mean less for services residents see, such as parks, streets and building maintenance.

The FY27 first-quarter status report, covering July through September, is on the council's Nov. 4 agenda as docket 2094.

The headline numbers

• Revenue. The city has recognized $2.08 billion, or 42% of what it expects for the year. Property taxes, the largest source, are at 49%, since bills are recognized in July and December. Excise revenue from the World Cup and Sail Boston came to about $1.8 million, which the report calls too small to change the full-year outlook.
• Spending. The city has spent or committed $1.589 billion, or 32% of the budget. Pensions and retiree health payments are made up front, so they show as fully spent.
• The bottom line. The Office of Budget Management expects the year to end broadly in line with the adopted budget. The next report is due in January 2027.

Where the pressure is

• Overtime. Police have used 34% of their $55.6 million overtime budget and Fire 36% of $34.4 million, a quarter of the way through the year. The report says both budgets have historically been overspent. Public Works has used 61% of its overtime budget and Parks 57%. Those departments, unlike police and fire, cannot legally end the year in deficit, so overruns must come out of their regular payroll. The report says this has created "significant service delivery pressure."
• Utilities and fuel. Utility spending is at "high risk" of exceeding its budget, and 69% of gasoline and diesel budgets are already committed because of high prices.
• Snow. 52% of the $22.7 million snow budget is committed ahead of winter. The report notes that last winter's costs required late-year budget adjustments.
• Court judgments. The Execution of Courts line, which pays legal judgments and settlements, was "zeroed out" in the FY27 budget process. It has already spent $3.2 million, and the report says the size of the deficit will depend on how cases are resolved.
• Health insurance. Costs are within budget so far. The budget assumed a 20.3% rate increase for non-Medicare plans.

What our records add

Last spring's warning. On April 8, City Councilor Erin Murphy told the council the city was projecting a fiscal 2026 deficit of about $48.4 million. She said it was driven by roughly $47.1 million over budget in snow and winter management, $48.7 million in public safety and $4.3 million in Execution of Courts, partly offset by a $13 million revenue surplus (watch at 2:07:18). Snow, public safety overtime and court judgments are the same three accounts state law lets the city overspend, and the same ones the new report flags.

The council's own budget changes. When the council passed the FY27 budget on June 10, Ways and Means Chair Benjamin Weber described an amendment package of $8.1 million that drew on several lines, including an added $100,000 from Execution of Courts (watch at 2:01:17; docket 0733). The report does not say how much of this year's court-judgment shortfall is tied to that change.

Hiring limits. The report says the FY27 budget "made significant reductions" to personnel budgets in several departments and asked departments to fill key vacancies to maintain core services.

What's next

Status reports are typically placed on file at the council, though any councilor can ask the Ways and Means Committee to take one up. The council meets Wednesday at noon (agenda). The administration's second-quarter report is due in January, when it will also update its estimate of new property tax growth, which the budget put at $40 million.