Cambridge City Manager Yi-An Huang Submits Proposed FY26 Budget to City Council

Cambridge City Manager Yi-An Huang has announced the proposed Operating and Capital budgets for fiscal year 2026 (FY26), as well as the FY27-FY30 Operating and Capital Plans, have formally been submitted to the Cambridge City Council.

The submitted FY26 Operating and Capital Budgets reflect the City of Cambridge's commitment to providing exceptional City services, including supporting education, investing in critical infrastructure, and meeting the evolving needs and interests of the community.

The Operating Budget of $991,181,320 marks a 3.7% increase from the previous year's budget – a lower growth rate than the 5-year and 10-year average. The proposed Capital Budget totals $151,140,770. A total property tax levy of $677,732,415 will support the General Fund Operating and Capital Budgets. This is an increase of $49 million (7.85%) over the FY25 property tax levy, reflecting major budget increases related to school department funding, salary increases, and higher debt service costs.

The moderate growth established for FY26 and beyond reflects a changing macroeconomic environment and the City’s vulnerabilities to unfavorable federal policy decisions. While budget growth has slowed, the City continues to invest in long-standing priorities, including affordable housing, early childhood education, school infrastructure, transportation safety, and sustainability. Cambridge’s strong fiscal policies and practices have enabled this continued investment while preserving long-term fiscal flexibility.

Below are a series of highlights of the FY26 Operating and Capital Budget that closely align with the City Council’s goals, which are used to guide overall priorities and major areas of work in the community:

Affordable Housing:
Total City support for affordable housing, combined with anticipated Community Preservation Act funds, will total $42.3 million in FY26. Through FY25, the City has allocated over $400 million toward affordable housing initiatives, preserving or creating more than 4,100 affordable units to date. Funding will support housing navigation and stabilization services, including application assistance, housing search and placement support, and services to maintain permanent tenancies.

Education and School Funding:
The School Department will receive a $12 million increase (4.5%) in funding, primarily covering salary increases negotiated in recent collective bargaining agreements. Of the 19 new full-time positions proposed for FY26, 11 are dedicated to staffing new Tobin Preschool classrooms.

Climate Resilience and Infrastructure:
The City will continue making investments in sewer and stormwater infrastructure, watershed improvements, flood mitigation, drainage systems, and water quality projects. Funding will support projects to remove infiltration/inflow sources in the Alewife Watershed, design a future floodwater storage tank at Sherman Street, and ongoing sewer and drainage repairs. Guided by the Net Zero Action Plan and the Building Energy Use Disclosure Ordinance (BEUDO), the FY26 Budget funds community energy programs to help residents and businesses reduce energy use and phase out fossil fuels.

Transportation and Mobility Improvements:
There will be an expansion of the on-street bicycle network and installation of traffic calming elements citywide. Collaboration with the MBTA will advance the next phase of the Bus Network Redesign, improving bus frequency and reliability in more neighborhoods.

Economic Opportunity and Equity:
Over $17 million in estimated FY26 expenditures will support programs and initiatives promoting greater economic opportunity, particularly for historically marginalized communities.

Municipal Facilities and Deferred Maintenance:
Construction of the Tobin Montessori and Darby Vassall Upper Schools Complex is expected to be completed and both buildings are scheduled to open at the start of the 2025–2026 school year.
Major renovations at the Fire Headquarters and ongoing projects at other city facilities will also be conducted.

The proposed Capital Budget of $151,140,770 includes major investments such as:

The City's strong financial standing was reaffirmed by receiving three AAA ratings from all three major credit rating agencies for the 26th consecutive year. Cambridge also recently issued nearly $166 million in General Obligation Bonds at a true interest cost of 2.96%.

The FY26 budget development process reflected strong collaboration between the City Administration and City Council, including close partnership with the Finance Committee. Beginning in fall 2024, the City hosted several public forums covering Council priorities, macroeconomic trends, budget planning, public investment strategies, and American Rescue Plan Act (ARPA) updates.

There will be public hearings on the FY26 Budget at the City Council Finance Committee on Thursday, May 8 at 9 a.m., Tuesday, May 13 at 6 p.m. (School Department), and Wednesday, May 14 at 9 a.m. The anticipated budget adoption date is Monday, June 2, 2025.

For more information on the FY26 Operating and Capital Budgets, please visit https://www.cambridgema.gov/Budget.

Link to Open Meeting Portal

Link to FY26 Submitted Budget (PDF)

Links to Specific Sections of FY26 Submitted Budget