Boston’s Fiscal Woes Stymie Wu’s Agenda After Reelection Blowout

Boston Mayor Michelle Wu dominated last year’s election. This year, a budget crunch is dominating the start of her second term.

The proposed $4.9 billion budget unveiled this week for the upcoming fiscal year is only 2% higher than this year’s, the smallest annual boost since 2009 and below the rate of inflation. A real estate slowdown has throttled Boston’s revenue growth, while higher health-care costs are driving up expenses.

Michelle Wu

Photographer: M. Scott Brauer/Bloomberg

The squeeze is blunting Wu’s momentum after her resounding victory in last year’s election, in which her main challenger — Josh Kraft, the son of billionaire New England ...