Amid an uncertain and unpredictable federal environment, renewed attention has been given to the funds that states and municipalities receive from the federal government. They provide an important source of support for a wide range of Boston’s city services and constituted 11.2 percent of the City’s all-funds expenditures in Fiscal Year 2024, per the most recent available data.
Over the past five years, the infusion of one-time federal Covid-19 relief funding, which constituted the majority of federal funds expended from FY22 through FY24, has been the major development in the federal funding landscape. These funds have driven overall federal expenditures upwards by $379.9M (207.6 percent) from FY20 to FY24 and will have brought over $1.1B to Boston upon their completion.
Boston’s two largest grants, ESSER and ARPA, are both programs designed for Covid-19 recovery, and they made up a majority, 53.4 percent, of federal expenditures in FY24. At the end of FY25, Boston had spent $429.4M (76.9 percent) of the $558.7M it received in ARPA funding, leaving $129.3M (23.1 percent) to be expended through the end of 2026. Meanwhile, ESSER funding, which brought $454M in federal aid to Boston Public Schools, faced an expenditure deadline of January 2025.
As these programs come to an end, the City must decide how, or if, to continue the programs that were funded through them. This transition makes the current federal environment even more critical as the expected natural decline in ARPA and ESSER funding could be coupled with cuts to longer-term grant programs that the City has relied on to provide services to residents.
Boston has historically received the overwhelming majority of its federal operating funds from five federal departments: Education, Housing and Urban Development, Agriculture, Homeland Security and Health and Human Services. Major education grants, coming from the departments of Education and Agriculture, go to programs such as ESSER ($203.8M), Title I ($58.9M), the National School Lunch Program ($30.9M), and the Special Education Grants to States ($17.9M), and make up a majority (55.3 percent) of FY24 federal expenditures. These programs provide critical services for the City in areas such as pandemic recovery, low or no-cost school lunches, and support for low-income and special education students.
The City spent $90.6M (16.1 percent) from the Department of Housing and Urban Development in FY24, going to programs such as the Continuum of Care program ($40.2M), Community Development Block Grants ($30.8M) and the HOME Investment Partnerships Program ($9.4M). These programs go toward services such as spurring housing and economic development for low-income residents and providing homeless individuals with permanent housing, transitional housing, and supportive services.
While the City has planned for the end of Covid-19 relief funds, what is not yet known is the full impact that any potential federal cuts will have on Boston’s receipt of federal dollars. Cuts in federal funding may impact municipalities directly or through secondary impacts from the loss of federal funding to the state, which is currently estimated at $3.7B. Depending on the state budgetary impact, the City could be impacted through downstream effects such as reductions in state aid.
Potential changes that could impact Boston include significant proposed cuts to Title I funding, Boston’s largest non-covid federal grant program. A proposal that passed the US House of Representatives Appropriations Committee included a 26 percent cut to Title I funding. Staffing reductions at the Department of Education, which President Trump has proposed eliminating, have also threatened management of existing grant programs that Boston relies upon, such as IDEA funding for students with disabilities.
The Trump administration has also proposed severe cuts to HUD grants, including the Continuum of Care program, Boston’s second-largest non-Covid-19 grant program. Cuts to these programs, given their importance to Boston, would have an outsized impact on the total amount of federal funds the city receives.
As Boston navigates a changing federal landscape, understanding what funds are received, what programs they support, and what is potentially at risk will be crucial in planning for the future and protecting against or attempting to offset future reductions in federal revenues to the City.
Grant Farrington is a policy analyst and Dylan Halky is a Northeastern co-op student at the Boston Municipal Research Bureau. The Research Bureau’s recent report, A Closer Look At Boston’s Federal Funds, is available on its website.
About the Author
