Boston’s top financial official announced Monday that the city is facing a $48.4 million budget deficit, driven by costs from record snowfall, healthcare and the perennial problem of public safety overtime.
In a letter to the city council on Monday, Chief Financial Officer Ashley Groffenberger said the figure amounts to 1% of the city’s operating budget. She said the projection does not include any shortfall identified from Boston Public Schools.
“Despite a series of expenditure controls first implemented in December 2025, the scale of major unforeseen expenses, particularly related to snow removal, has required additional action,” her letter said.
The budget team typically uses five-year snowfall averages to determine how much money to set aside for winter weather, but this past season dropped more than 60 inches of snow onto the city — the most Boston has received since 2015, according to interim Streets Chief Nick Gove.
“Snow and winter management” costs ran over budgeted amounts by about $47 million, while “public safety” costs neared $49 million, Groffenberger’s letter indicated. Another $4.3 million gap came from “execution of courts,” as the city grapples with lawsuits like the ongoing legal battle over the White Stadium redevelopment.
Groffenberger said increases in healthcare insurance costs also contributed to the gap, though she did not specify a figure. Last week, the Wu administration announced a cost containment deal with the Public Employee Committee to limit coverage of GLP-1 drugs. The agreement is expected to save the city budget about $10.6 million, according to a press release.
Underperforming licensing and permitting revenue are also contributing about $7 million to Boston’s oncoming deficit. Earlier in the year, Mayor Michelle Wu announced a round of reforms aimed at easing the permitting process, including a waiver of permitting fees for small restaurants and community spaces that don’t serve alcohol and have less than 50 seats.
At the same time, Boston’s excise tax collection of $15.2 million outperformed, helping to mitigate the gap. Motor vehicle excise, hotel rooms and jet fuel are all performing better than estimated.
The announcement comes as Mayor Michelle Wu prepares to debut a budget proposal for the fiscal year that begins July 1. The mayor had previously slowed hiring and asked city departments to focus on core services and hold off on new spending to brace for new budget pressures amid cuts to Boston’s federal funding under President Donald Trump.
Federal funding was not, however, listed among the major issues causing budget overruns.
Groffenberger said the city “is actively implementing additional measures, such as tightly managing all discretionary expenditures and hiring through the final quarter, which begins on April 1,” to help control costs.
“We will also continue to monitor and update this projection regularly, incorporating any updated revenue or expenditure projections throughout the remainder of the year, particularly given the number of large-scale events in June and further impacts associated with health insurance costs,” the CFP said.
Groffenberger said the mayor is also considering a supplemental budget “to ensure a responsible and orderly year-end close.”
