Citing economic uncertainty and anticipated federal cuts, Mayor Wu advised city councillors this week that they should expect a cautious FY26 budget proposal from her administration, which is expected to be submitted for review next week.

In a letter dated April 1, the mayor responded to correspondence from City Councillor Brian Worrell, who held hearings in recent weeks as chairman of the council’s Ways and Means Committee. Worrell had advised the mayor “to limit [the city’s] overall budget growth in order to stay nimble enough financially to backfill critical city services for any federal funds that are lost in FY26.”

He wrote: “Last fiscal year, the city saved tens of millions of dollars in salaries, and in order to achieve the City Council's limited requests, we suggest leveraging payroll savings from the nearly 2,000 vacant jobs in the city.”

Wu’s response offered a similarly cautious tone.

“This year’s budget must reflect fiscal discipline to protect Boston’s community and economy in the face of federal uncertainty,” she wrote. “The FY26 budget will focus on protecting critical city services our residents and businesses depend on and meeting our long-term financial obligations. City departmental budgets…will reflect eliminating long-term vacancies to constrain growth, with no new City positions; targeted reductions in non-personnel items; and limited new resources to support critical services.”

In summarizing his findings, Worrell suggested finding savings to implement urgent needs and existing services, including more support for housing and food insecurity; protecting Boston’s diversity and inclusion; increased investments in quality of life issues; expanded youth programs; and expediting capital projects like Town Field’s reconstruction and fixing the Holland Community Center’s pool.

“I'd like to reiterate the importance of fiscal responsibility in our current national environment,” he continued. “I appreciate your leadership and dedication to our city, and I look forward to continued collaboration to advance these investments.”

In turn, Wu applauded Worrell’s pro-active approach and noted the city is bracing for federal cuts and impacts from Trump’s trade policies, including tariffs.

“With over $300 million of federal funds supporting critical city services each year, and with likely impacts from federal tariffs and other policy changes to the broader economy, we must exercise caution to ensure stability for our communities—preparing for worst case scenarios while refraining from preemptive disruption of city services,” she wrote.

The mayor is set to release her budget proposal next week. It will go before the City Council and be assigned to the Ways & Means Committee. That panel typically holds scores of budget hearings over April and May featuring all city departments and input from the residential and business community. The deadline date o finish the budget process is June 30, with the new municipal fiscal year starting on July 1.