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Mayor Michelle Wu announced that Boston has again maintained its AAA/Aaa bond ratings and stable outlook from S&P Global Ratings and Moody’s Investor Service ahead of its upcoming 2026 bond sale.

The City has earned the highest possible ratings for the 13th consecutive year, reflecting confidence in its sound financial management and long-term stability. This year, seven major cities carry a AAA/Aaa bond rating from both Moody’s Investor Service and S&P Global Ratings.

“Only seven major cities carry a triple-A (AAA) bond rating from Moody’s Investor Service and S&P so far this year—a distinction Boston has achieved for the 13th year in a row. This rating indicates the highest credit quality and lowest risk, reflecting our City’s long-standing strong fiscal management and enabling us to borrow at the lowest possible rates for capital investment,” said Mayor Michelle Wu. “Our AAA bond rating saves taxpayers millions of dollars as we continue investing in our infrastructure, strengthening neighborhoods, and delivering city services for the highest quality of life. Even in a challenging national economic environment, Boston will continue to deliver results through innovative governance, sound fiscal management, and strong community partnerships.”

Since 2014, the City has maintained the top credit rating from both rating agencies in recognition of its strong fiscal management and the strength of its local economy. This year’s distinction affirms that the City remains in a position of strength despite a challenging national economic environment, as a result of years of disciplined financial stewardship, strong reserves and more than a decade of triple-A bond ratings.

“Fiscal discipline is at the core of what we do everyday as a City and this rating from Moody’s and S&P acknowledges the City’s strong position and long-standing fiscal management practices,” said Ashley Groffenberger, Chief Financial Officer. “The City will continue to manage through evolving, unpredictable, and challenging economic cycles and ensure Boston is in the best position to address uncertainty and fulfill its financial commitments.”

This triple-A rating ensures Boston will get the best possible rates when investing in the public infrastructure that gives our residents the highest quality of life, from our parks and libraries to our roads and schools. Borrowing at the lowest possible interest rates will also save Boston’s taxpayers millions of dollars in the long-term, enabling us to deliver excellent city services at a much lower cost.

“Earning another AAA bond rating shows the benefits of the disciplined collaboration between the Mayor and the City Council on our budget year after year,” said City Councilor Ben Weber, Chair of the Committee on Ways and Means. “Despite facing economic challenges, we are still building on a strong foundation because of the hard work and talents of our residents.”

Highlights from the rating agencies include:

Moody’s Investor Service

“Boston’s financial position is strong. The city maintains healthy reserves and liquidity and relies on property taxes as a stable revenue source. The city has a long history of maintaining structurally balanced operations.”

S&P Global Ratings

“Forward-looking and proactive management with well-embedded policies and practices for budget and financial planning as well as for challenges, including affordable housing and environmental risks we believe the city has flexibility to absorb this pressure without multi-year budget stress.”

The Fiscal Year 2027 budget filed by Mayor Wu continues the City’s long record of carefully balanced budgets and responsible fiscal management by delivering strategic savings and protecting core city services residents and businesses rely on. The City of Boston will continue to meet fixed and long-term financial obligations, deliver for residents and families, and remain deliberate and disciplined amidst an evolving, unpredictable economic climate.

The City typically issues bonds at least once per year and expects to go to market on the sale of its 2026 General Obligation bonds the week of May 11, 2026. The upcoming bond sale is expected to generate $600 million in new funding for more than 200 capital projects in the City, including new and renovated schools, major park and playground renovations, new libraries, community centers and pools, energy improvement projects, and other state of good repair and infrastructure projects.

The Moody’s and S&P reports are available on the City’s website here and here.

Mayor Michelle Wu filed her Fiscal Year 2027 operating budget and five-year 2027-2031 Capital Plan. The FY27 budget reflects a deliberate and disciplined approach to protecting the core services our residents and businesses rely on while positioning Boston for long-term fiscal stability. It is designed to ensure the City overcomes the current fiscal environment and emerges in a stronger position.

As cities and towns across the Commonwealth and the country face a challenging fiscal environment marked by rising costs, slowing revenue growth, and economic uncertainty, the City’s $4.9 billion FY27 operating budget and the $4.4 billion five-year Capital Plan balance fiscal restraint with continued investment in Boston’s future.

Despite these structural challenges, Boston enters this environment from a position of strength, supported by years of disciplined financial stewardship, strong reserves and more than a decade of AAA bond ratings. However, the City is also navigating these conditions within the constraints of the Commonwealth’s rigid limitations on municipal revenue generation and diversification, including Proposition 2 ½. Escalating fixed cost pressures, combined with contractual obligations and inflation, continue to significantly outpace the revenue growth allowed under Proposition 2 1⁄2.

The FY27 budget increases by only 2.1%, the lowest growth rate since FY10 and well below the current rate of inflation. City departmental appropriations will decrease by 1.3% year-over-year, after accounting for health care and other central account costs. Unlike many other Massachusetts cities and towns, this proposed budget does not seek an override for additional revenue beyond what is allowed by Proposition 2 ½.

“City government is where we find a way to get things done, and where we do what matters most,” said Mayor Michelle Wu. “This proposed budget funds city services for the highest quality of life, delivers significant savings, and protects Boston’s continued progress in tough economic times. I’m grateful to the City Council for their partnership, and we look forward to continued due diligence and collaboration over the next few months.”

“This budget addresses the challenges posed by the current fiscal environment with long-term stability in mind,” said Ashley Groffenberger, Chief Financial Officer for the City of Boston. “The City is focused on disciplined financial stewardship in an evolving, unpredictable economic climate. With our years of responsible budget management and strategic decisions, Boston is well-positioned to meet this moment from a secure position in the short and long-term while delivering on our core services and commitments to employees, residents, and families.”

Over the past four years, federal relief funding and city investments enabled the City to increase support for small businesses and nonprofit partners, fill vacant storefronts, expand cultural programming across our neighborhoods, and deliver critical projects across Boston communities. With tighter fiscal conditions and rising fixed costs, this year’s recommended operating budget significantly reduces or removes funding for many of these discretionary grant programs. The City has also sought to preserve other City programs that provide similar services or leveraged public-private partnerships to help bridge gaps in services. At the same time, strategic financial management has helped us avoid deeper, more disruptive cuts to essential services and operations while keeping us on track to meet our debt obligations and unfunded pension liability by 2028. By managing long-term pension and debt liabilities, the City will save $37.8 million compared to FY26.

“We know that, across Massachusetts, cities and towns are finding fiscal 2027 to be a particularly challenging year,” said MMA Executive Director and CEO Adam Chapdelaine. “Boston is by no means alone in facing unavoidable costs that are far outpacing inflation and revenue growth, and the reality of very limited options to address these costs and preserve the essential services that all residents and businesses rely on. This is a year of difficult decisions, and the mayor and her team are using every creative lever at their disposal to preserve core services.”

By protecting essential city services, funding core priorities and delivering significant savings, Boston will continue to build on our progress by meeting fixed and long-term financial obligations, delivering for residents, and remaining adaptable amidst a difficult fiscal environment.

To address key drivers of deficit in the prior fiscal year, this year’s FY27 recommended budget builds in the following cost containment strategies.

Health care costs

Rapidly rising health care costs continue to be a major challenge for the City. The City and the Public Employee Committee (PEC) recently reached an agreement to curb growing health care costs, generating an estimated $10.6 million in savings for the City and its employees through utilization management. In the next month, the administration will begin negotiations with all municipal unions on healthcare costs through the PEC, looking to set a new five-year health insurance plan that must take steps to address the unsustainable growth of costs that the City has faced. Even with these efforts, Health insurance costs for the City, Boston Public Schools (BPS), and Boston Public Health Commission (BPHC) are projected to increase by $97.3 million this year, driven by a 20.3 percent rate hike for all non-Medicare health plans that far exceeds the average annual rise of $10.6 million over the past eight years.

Public Safety Overtime

Public safety overtime spending remains a significant long-term challenge. Over the past four years, the administration has implemented operational changes to reduce the number of overtime hours. The police overtime line item, for example, has increased with collective bargaining agreements adjusting wage per overtime hour, but the number of hours has decreased and continues to move in the right direction as new classes and management initiatives have begun to reduce the use of mandatory overtime to cover staffing shortages. The City will continue working to make public safety overtime spending more predictable and manageable while maintaining the safety of our neighborhoods.

Snow Removal

In five of the six fiscal years prior to FY25, the City underspent the budgeted snow removal line, resulting in surplus that accumulated in the general fund and contributed to the City’s reserve balances. Historically significant snowfall in early 2026 resulted in a deficit in the snow removal budget line, which is an appropriate one-time cost to be addressed through an allocation from reserves accumulated over the last several years. As New England’s weather patterns shift to less frequent but more intense snowstorms, this same pattern of uneven snow costs will likely persist. While this year’s line item for snow removal represents level funding from the FY26 budget, not relying on additional use of reserves to balance the overall FY27 budget ensures that the City is able to maintain flexibility to utilize reserves in a future year to address extraordinary, unforeseen costs like those we experienced this winter. Additionally, the City will explore the possibility of creating a special snow stabilization fund to specifically address snow shortfalls in the future.

The FY27 recommended budget includes the following key priorities:

Housing Affordability and Stability

Our administration will continue to prioritize housing affordability and stability. This recommended budget maintains the City’s tools to preserve and strengthen stability and affordability across the city’s neighborhoods. Over the last four years, these investments by the City have helped build 6,210 new income-restricted units, the highest number of affordable housing units created during any comparable period in the last 25 years. Our Acquisition Opportunity Program (AOP) reached its goal of taking 1,000 units off the speculative market, years ahead of schedule. In FY27, the City will protect 100 families through AOP, stabilizing over 200 residents. While the Mayor’s Office of Housing (MOH) will see an overall decrease in this budget, funding for key programs has been maintained, including homeownership assistance, supportive housing tenant stabilization, and housing vouchers. MOH will use federal and state funds, the Boston Acquisition Fund, and locally generated revenues from Housing Trust Fund, Inclusionary Development Policy (IDP) and the Community Preservation Act (CPA) to continue to build and preserve affordable housing.

Youth Employment and Development

Summer youth employment remains a core focus of the administration’s efforts to strengthen Boston’s future. Over the past two summers, nearly 11,000 students and young people worked jobs - the most in Boston’s history. This budget maintains our guarantee that every BPS student who wants a paid summer job has access to one. To ensure this work remains secure, several programs previously managed within the Office of Youth Employment and Opportunity (OYEO) focused on youth development and career readiness have shifted to other cabinets and bolstered through partnerships with the State and private sector.

Public Realm and Quality of Life

The City will continue to build on progress made with excellent constituent services to improve quality of life and maintain and improve streets for Boston residents, families and visitors. Over the four past years, the City has resurfaced 105 miles of roadway, filled over 27,000 potholes and nearly doubled the City’s network of bike lanes. The Streets Cabinet will see a modest budget increase in FY27 due to the cost of existing long-term contracts for essential services, such as managing the City’s mobility infrastructure, collecting residential trash, and maintaining the cleanliness of our public ways. Planned efforts include roadway resurfacing, sidewalk and ramp upgrades, street reconstruction and neighborhood safety projects. Several major projects are currently underway with construction in progress on A Street, Congress Street, and Sleeper Street, which will feature new, accessible sidewalks, safer crosswalks, street-light upgrades, landscaping, and separated bike lanes. In Mattapan, reconstruction of Cummins Highway is underway and expected to be completed this summer. The City is continuing to also invest in Boston’s parks, recently cutting the ribbon on renovations at Harambee Park, Walsh Playground, and Codman Square Park and are nearing completion of improvements to Copley Square and Clifford Park.

Public Health and Safety

The City is working every day across city agencies and with community partners to maintain Boston’s position as the safest major city in the country. The FY27 budgets for the Boston Police Department, Boston Fire Department, and Emergency Medical Services includes funding for recruit classes that will replace staff loss from normal attrition. Although there were targeted reductions to civilian positions in these departments, the City will be able to maintain service levels across these critical agencies due to key investments over the last few years, including a capital investment of $3.3 million to upgrade the computer-aided dispatch (CAD) system, improving 911 call-takers’ ability to quickly and securely receive and dispatch calls. To support continued progress on safety, Police, Fire and EMS will continue to utilize their cadet programs as steady pipelines to ensure departments are fully staffed and reflect residents of Boston.

The administration continues to take a public health-centered approach to addressing community violence with funding preserved or alternative response capacity, including programming with BEST clinicians and our partners at Youth Connect to address the underlying trauma, mental health issues, or family instability that often lead to police intervention. The Community Safety team will fully move from the Office of Human Services to the Boston Public Health Commission (BPHC) in FY27, reflecting the administration’s continued focus to ensure residents and families are healthy and connected to services and supports.

Human Services

The City continues to maintain initiatives that engage residents and connect families to critical programming and resources across neighborhoods. The City’s Human Services budget maintains evening and weekend hours and programming at libraries and BCYF centers, as well as classes for adult English-language available at no cost to residents through the Boston Public Library. While Age Strong will see a decrease in FY27, the City secured a $1 million federal earmark for transportation services that will help older residents get around more easily across Boston. City funding that helps older residents access state and federal benefits is also maintained.  Boston Veterans Services will continue to provide need-based financial aid to low-income veterans and their surviving spouses for food, shelter, clothing, medical reimbursements, and emergency aid for utilities and home repairs. The City is nearing completion of the new BCYF community center in Grove Hall and recently broke ground on a new Nazzaro Community Center in the North End. In Chinatown, the City recently broke ground on a project at 55 Hudson Street that will bring 110 affordable homes and a new permanent branch of the Boston Public Library to the neighborhood, turning a City-owned parking lot into a vital community anchor. The City continues to also plan for additional community facilities.

Education and School Facilities

Public education represents the largest operational departmental budget, with the FY27 Boston Public Schools budget maintaining our multi-year investments in the core academic priorities that improve student outcomes: inclusive education, bilingual programming, high-quality instructional materials, and expanded college and career pathways.  The BPS FY27 appropriation of $1.7 billion reflects a year-over-year increase of 5.4 percent, or $88 million. After isolating the disproportionate impact of health care inflation, the underlying budget growth is 2.7 percent or $41 million. To continue these investments amid declining student enrollment and rising costs, BPS has made difficult decisions to align staffing levels with a smaller student body. In aligning staff with students, BPS is maintaining a ratio of 1 teacher for every 10 students and 1 paraprofessional for every 24 students. These are lower staff-to-student ratios than pre-pandemic, and equal to the staffing ratios in the FY26 budget. While these reductions in staff positions are difficult for school communities, they are essential to the responsible stewardship of public dollars.

To build on Boston Public Schools’ progress, the City has launched more school facility renovations and construction projects than at any time in the last 40 years, while expanding access to high-quality pre-K seats and early college access than ever before. Over the last year, we have cut the ribbon on major projects at the PJ Kennedy Elementary School in East Boston, the William E. Carter School in the South End, and the Sarah Roberts Elementary School in Roslindale. Through our partnership with the Massachusetts State Building Authority (MSBA),  the City is moving forward with the Madison Park Technical Vocational High School project. This investment will deliver a nation-leading, wall-to-wall Career and Technical Education high school and hub of workforce development in the heart of Roxbury. We are also partnering with the MSBA on investments in the Ruth Batson Academy in Dorchester and the Shaw-Taylor Elementary School in Mattapan, which will begin design this year. At the same time, renovations are underway at the Lilla G. Frederick building in Grove Hall, which will reopen as a new elementary school this fall. Plans to renovate the auditorium and other interior spaces at Brighton High School are also in development.

Across the district, the City and BPS are accelerating state-of-good-repair improvements, upgrading bathrooms, roofs, windows, and doors; enhancing energy efficiency, and improving playgrounds. Next year, the City will complete the renovation of White Stadium, transforming it into a state-of-the-art athletic facility for BPS Athletics and a year-round, vibrant community hub for Franklin Park.

Mayor Michelle Wu today announced that Boston has again maintained its triple-A bond ratings and stable outlook, as assigned by Moody’s Investor Service and S&P Global Ratings, in advance of its upcoming 2025 bond sale. Since 2014, the City has maintained the top credit rating from both rating agencies. The agencies’ affirmations of Boston’s strong financial health is a recognition of the City’s strong fiscal management in the wake of uncertain economic times nationally. Mayor Wu’s FY26 budget, filed in April, underscores Boston’s strong fiscal management by enabling Boston to meet its long-term financial obligations while preserving the excellent City services residents and businesses depend on.

“This is the highest possible rating a city can earn and a sign and affirmation that our economic fundamentals are strong and that our local economy is resilient, vibrant, and growing,” said Mayor Michelle Wu. “This rating means we are able to get the best possible rates when we make critical investments in our city’s infrastructure from our schools to our fire stations. As the current federal administration sows economic chaos and targets the industries that Boston relies on, Boston remains determined to fight back.”

According to Moody’s Investors Service, Boston’s Aaa rating reflects what their report called a resilient economy that benefits from “a healthy mix of industries anchored by significant and world-renowned higher education and healthcare institutions.” The report also noted Mayor Wu’s budget proposal and a stable economic outlook for the City in the wake of national uncertainty.

The recent S&P Global Ratings report reflected a similar stable outlook for Boston, noting “that the city’s comprehensive budget framework, combined with proactive management, will enable it to maintain structural balance in the near term, despite significant policy uncertainty.” The analysis noted Boston’s position as an anchor in the region’s larger, robust economy and proactive budget management policies.

“Fiscal discipline is not new to Boston, and this rating action from Moody’s and S&P acknowledges the City’s strong financial position and long-standing fiscal management practices,” said Ashley Groffenberger, Chief Financial Officer. “The City has earned these ratings through years of diligent budget management, which has allowed us to manage through challenging economic cycles and will put us in the best position to manage future uncertainty. I want to thank the dedicated staff of the Finance Cabinet for the work they do every single day to preserve this rating.”

The City of Boston remains in a strong fiscal position due to consistent and responsible budget management that allows the City to routinely return budget surpluses. 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, the City is exercising caution in this year’s budget to ensure stability for residents and essential City services. The Fiscal Year 2026 annual operating budget filed by Mayor Wu is $4.8 billion and the five-year 2026-2030 Capital Plan is $4.5 billion. By slowing budget growth, Boston will continue to meet the fixed and long-term financial obligations, deliver for residents, and stay adaptable amidst shifting economic and federal dynamics.

“Boston has yet again secured a AAA bond rating, demonstrating the smart fiscal management of the city, even in challenging times nationwide. We stand out among our peer cities. It demonstrates that we can do the work of shared prosperity - investing in the needs of our residents and neighborhoods equitably while maintaining Boston’s status as a sound investment for investors,” said City Council President Ruthzee Louijeune.

“Thanks to the city’s track record of smart budgeting over several administrations, Boston remains fiscally strong, and these bond ratings are further evidence of that,” said Councilor Brian Worrell (District 4), Chair of the Committee on Ways & Means. “I look forward to ensuring we continue to invest in city services while overseeing our budget to safeguard our residents from higher tax burdens.”

The City typically issues bonds at least once per year and expects to go to market on the sale of its 2025 General Obligation bonds the week of May 19, 2025. The upcoming bond sale is expected to generate $500 million in new funding towards nearly 200 capital projects in the City, including new and renovated schools, major park and playground renovations, new libraries, community centers and pools, energy improvement projects, and other state of good repair and infrastructure projects.