Wu details $3.99 billion budget, city priorities for COVID relief funds

New mayor proposes major investments in housing, small decrease in police spending

Mayor Michelle Wu spoke with a reporter recently in her office at City Hall in Boston.Michael Dwyer/Associated Press

Boston Mayor Michelle Wu unveiled the most detailed look yet at her financial plans for the city Wednesday morning, proposing a $3.99 billion operating budget and other spending proposals she says will guide the city through its recovery from COVID-19 and lay the groundwork for the transformational change she campaigned on.

Wu proposed her budget for fiscal year 2023, and described how she intends to spend hundreds of millions of dollars the city received for COVID recovery through the federal American Rescue Plan. The financial plans offer a significant look at the administration’s priorities, a dollars and cents measure of how much Wu intends to put behind all the policy ideas she’s tagged as priorities. The mayor is set to detail the budget Wednesday at the city’s traditional budget breakfast.

That rollout launched a monthslong process of hearings and debate over how much the city should spend this fiscal year, and on what. And it comes in the first year of a new budget process that gives the City Council far more power than it has had in the past, a major structural shift that will test Wu’s sway over the body where she served until last year.

Wu’s budget would spend $216 million more than the city allocated for the last fiscal year, pouring hundreds of millions of dollars into many of the issues she campaigned on, such as housing and the environment. It would also increase investments in small businesses, expand workforce development, and fund a new office that would connect women- and people of color-owned businesses with city contracts.

The mayor also intends to lean heavily on one-time COVID relief funds for “once-in-a-generation, transformational investments that must create lasting impact,” she wrote. Of the roughly $350 million that remains to be allocated from a flexible pot of federal funds, Wu proposed spending $31.5 million on climate-focused investments, $15 million on the early education and child-care system, and $206 million on various housing efforts, including assistance for first-generation homebuyers and upgrades to public housing units.

“As we continue to emerge from the pandemic, this budget points the way toward an equitable recovery and charts the course for our brightest future,” Wu wrote in the letter. Together, the budget and federal COVID funds will “jumpstart solutions to long-term challenges; coordinate across departments and sectors to delivery equity, climate resiliency, jobs, and health as the foundation for a Boston Green New Deal; and prioritize financial sustainability beyond ARPA.”

Financial watchdogs are wary of using those federal funds for ongoing expenses, warning that the city must come up with a plan now to fund those programs when the federal money dries up in a few years. Wu has argued that by paying for such programs now, her administration will demonstrate their importance and make the case for maintaining their funding into the future.

One particularly contentious line item in the budget may be that of the Boston Police Department, whose funding has been a flashpoint — and a political litmus test — in the city’s recent budget debates.

Last year, as a city councilor and mayoral candidate, Wu was one of just two dissenting votes on the city’s budget. She said at the time she cast her “no” vote in part because the budget failed to present the “real reforms to the Police Department” the city needed. In 2020, Wu was one of five councilors to vote against a budget proposed by then-Mayor Martin J. Walsh, which critics said did not do enough to address issues of structural racism.

In June 2020, in the wake of the murder of George Floyd, Wu signed on to a letter detailing a reform agenda for Black and brown communities in Boston, including a 10 percent reduction in the Police Department’s regular and overtime budgets. When asked about that proposal during last year’s mayoral race, Wu was more circumspect, saying “it’s not enough to just put a specific number” and calling for broad reforms to the department.

Now, Wu is proposing a 1 percent cut to the Boston Police Department budget, from just under $400 million allocated in fiscal year 2022 to about $396 million in fiscal year 2023. She intends to spend about $10 million less on personnel services, while increasing the department’s budget in other areas.

Wu’s budget proposal also includes investments in new offices she has created, like the Office of Black Male Advancement, which she proposes to fund with $1.2 million, and the Office of LGBTQ+ Advancement, for which she earmarked $295,000. With those increases, though, would come cuts to other programs; the Office of Equity, for example, would see its budget trimmed from $4.3 million in the last fiscal year to $1.4 million, and the Office of Women’s Advancement would receive about $400,00 less than it was allocated for fiscal year 2022.

Overall, Wu’s operating budget would slightly trim spending for the city’s Equity and Inclusion Cabinet, from $10.7 million allocated in fiscal year 2022 to about $10.2 million in fiscal year 2023. However, the city plans to put other funds, like the COVID relief money, toward other equity-focused initiatives.

Comprehensive spending plans were not available Tuesday, and the mayor’s office declined to answer detailed questions, saying city officials will offer more specifics later this week.

Wu’s first budget season as mayor takes place under a new process approved by Boston voters in a referendum last year. In previous years, the City Council had been empowered only to approve or reject the mayor’s proposed budget, and could transfer funds only if the mayor requested it. The new process allows the council to amend the budget, so long as it does not exceed the original amount proposed by the mayor.

Supporters argue the new budget process will be more democratic and transparent, since councilors will have greater opportunity to advocate for their constituents’ interests. But critics warn the change will make for a chaotic budgeting process that could risk the city’s credit rating.