Mayor proposes a $4.6b budget

Plan for fiscal year calls for 8% increase

Amid an uncertain economy, Mayor Michelle Wu of Boston this week proposed a healthy increase in city spending, filing with the City Council a $4.6 billion budget for the upcoming fiscal year.

As state government freezes some hiring, and the Boston Public Schools district faces a budget that would slash hundreds of positions, Wu on Monday took a measured view of the city’s economic outlook, citing “solid revenue growth” as she proposed increasing the budget by

$344 million, or 8 percent, over the previous year.

In a letter to the council, Wu also acknowledged projections that commercial property values will continue to drop — a trend that could force the city to choose between higher taxes on homeowners or steep budget cuts. She has already filed legislation seeking permission to temporarily increase the tax rate the city can levy on commercial real estate to avoid raising taxes for homeowners, but the measure is still awaiting City Council and legislative approval.

“As we continue to gain greater understanding of the long-term economic impacts of the pandemic and prepare for shifts in the value of commercial real estate,” Wu wrote, the city is taking “protective action so that future tax bills for all property owners — commercial and residential — are similar to those in recent years.”

Wu attributed part of her proposed spending increase to the creation of a new city planning department, which will move the Boston Planning & Development Agency’s employees, operations, and properties under City Hall’s purview starting this summer. However, the revenue the BPDA collects from

Mayor Wu cites solid revenue growth but also expects a drop in commercial property values.

leases on city property will offset the required spending increases to pay for those employees and operations, city officials said.

Newly negotiated union contracts that promise city workers raises, more money for BPS, and the city’s obligation to fund pensions and pay its debts also contributed to the recommended budget increases, according to the mayor.

“To plan responsibly through shifting economic patterns and resulting impacts, this budget prioritizes sustainable investments that set us up for continued stability,” Wu wrote in the letter.

The spending plan also proposes more funding for existing programs, including:

An additional $1 million for rental assistance and decarbonization efforts.

An additional $1 million for low-threshold housing to combat substance use and homelessness.

About $1.3 million to pay for 12 new EMT positions.

An additional $20 million for inclusive education programs at BPS, including support for students with special needs and English learners. An additional $3 million to streamline the city’s licensing and permitting process. Among the top-line items on the city’s budget are expenses for the police and fire departments. Wu’s proposed 2025 budget would boost spending on the Police Department by 12.3 percent, from about $405 million to $454.9 million, and would increase spending on the Fire Department by 10.3 percent, from around $278 million to $306.6 million.

Health insurance for city employees is also one of the largest expenditures; under Wu’s proposal, spending on those benefits would increase 5.3 percent from $222.4 million to $234.1 million.

BPS historically makes up the largest portion of the city’s annual spending, with a budget last fiscal year of $1.45 billion. At the end of March, the School Committee voted to approve a $1.5 billion budget for the upcoming 2024-25 school year, that incorporated a range of proposed cuts to current spending, including eliminating hundreds of positions and consolidating classrooms. The district is facing a variety of financial challenges, including the end of federal pandemic relief dollars and declining enrollment.

Wu is slated to unveil a more in-depth look at her recommended spending ahead of Wednesday’s City Council meeting.

Niki Griswold can be reached at niki.griswold@globe.com. Follow her @nikigriswold. Emma Platoff can be reached at emma.platoff@globe.com. Follow her @emmaplatoff.

Mayor Michelle Wu is expected to unveil a more detailed look at her spending plan this week.