Ways and Means hears FY26 budget preview as officials flag $88M surplus and rising public-safety costs

Boston City Council Committee on Ways and Means Chair Brian Worrell convened a Feb. 27 hearing on the city’s preliminary budget outlook for fiscal year 2026, where city finance officials described a strong year-end position but warned of recurring pressure from public-safety overtime, legal payouts and other fixed costs.

The administration reported that fiscal 2024 closed with about an $88 million surplus and a $177 million revenue surplus largely driven by investment interest and excise taxes, but said much of the overspending came from public-safety overtime and court-ordered payments.

“I think we agree the City is in a good financial position,” Ashley Grafenberger, chief financial officer for the City of Boston, told the committee. Grafenberger joined Budget Director Jim Williamson for the presentation.

“the bottom line, we had an $88,000,000 surplus, which is roughly 2% of expenditures,” Williamson said, summarizing year-end figures and explaining how surplus revenue converts to free cash after state certification.

Why it matters: The surplus gives the city flexibility going into FY26, but the administration warned that recurring liabilities — notably police overtime, court judgments and pension and health-care cost growth — will drive next year’s expenditure pressures. Committee members pressed administration officials on which balances are reliable and which are volatile.

Key points from the presentation and Q&A:

- Revenue drivers and…