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The blessing of managing New Bedford’s finances is also its most terrible curse: most of the money spent in the Whaling City is not raised by local property taxes.

Chief Financial Officer Bob Ekstrom speaks at last week’s finance committee meeting. Credit: Image provided

“Even before we asked our first department to weigh in [on next year’s budget], we have $28 million of expenditure increases locked in,” Chief Financial Officer Bob Ekstrom told city councilors at last week’s finance committee meeting. 

As the Statehouse debates Gov. Maura Healey’s first draft of the state budget, and worldwide markets tremble at the ongoing conflict in Iran, New Bedford is staring down another year of higher costs that it cannot control. 

In a letter forecasting the city’s budget outlook, Ekstrom warned city councilors that state-mandated education spending, pension contributions, and normal debt service already accounted for 73% of the city’s anticipated budget. “None of these items are subject to any local decision-making and will cost $391.8 million in 2027,” Ekstrom wrote. 

The bottom line is that New Bedford, Ekstrom forecasted, could be seeing a $10 million to $15 million deficit in the next fiscal year, which could potentially obligate the city to raise the tax rate. 

Click to enlarge

The tax rate in New Bedford has been decreasing for consecutive years, though for many homeowners that has been offset by rising property assessments. 

More than half the pie in local spending comes from state aid, and even the most significant infrastructure spending — such as the new Congdon-DeValles Elementary, set to open in 2027 — does not lean on the local homeowners’ property taxes, thanks to school building and transportation programs at the state level.

Ekstrom told city councilors that local costs are likely to increase, even without any increase to city-provided services. Health insurance and recently approved cost-of-living adjustments (COLAs) for city pensioners will add to the local burden, Ekstrom said.

Pensioners will receive cost-of-living adjustment (COLA)

City councilors absorbed information about the rocky budget picture for the next fiscal year, but decided last week that providing retired city employees with more benefits was worth the cost. 

“This increase is justified,” said City Council President Ryan Pereira. 

The council approved increasing the “COLA base” from $14,000 to $16,000 — meaning that any voted-upon increases to retiree benefits will be drawn from a larger amount of their pension. A 3% COLA increase, for example, will now yield retirees an extra $480 annually.

Leonard Baillargeon, the chairman of New Bedford’s Retirement Board, told councilors that 17% of all New Bedford retirees receive benefits at or below the 2026 poverty line. 

“I’m also a concerned taxpayer,” said Baillargeon, adding that retirees just want to be “on par with [the benefits in] other systems.”

Estimates suggest that these COLA increases will add approximately $1 million to New Bedford’s annual budget. 

Bond-rating agency says New Bedford is stable  

Financial managers in New Bedford also presented city councilors with the latest report from S&P Global Ratings. The agency determines the creditworthiness of the city, which affects the city’s ability to take on and finance debt.

The review found that New Bedford had a “low risk” profile, earning an AA+ long-term rating and an AA- underlying rating — historically among the best ratings the city has received. (The “underlying” rating evaluates the city’s standalone risk, without the backing of other guarantors.)

“New Bedford’s diversifying local economy, recently stable financial performance, and increasing reserves in recent years” led to the positive review, according to the ratings agency. 

Some risk factors included the city’s dependence on “free cash” transfers to fund several departments, including the police and snow removal. “Free cash” refers to unspent funds at year’s end.

“If future budgets rely on free cash appropriation for operating costs, we could reconsider our view of the city’s performance,” the ratings agency wrote. 

Email Colin Hogan at chogan@newbedfordlight.org

16 replies on “New Bedford officials anticipate $10 million or more in deficit challenges”

  1. New Bedford is broke, we have no private economic growth, we can’t continue to rely on state aid and it’s time for the city leadership (the mayor and city council to get a back bone and shut down the spending, make cuts across the board in all departments, and stop adding to this big bloated city budget. Our city can’t continue to survive with our leaders spending money they don’t have. NEW BEDFORD NEEDS NEW LEADERSHIP IN CITY HALL.

    1. 100% agree, make cuts across the board, and reduce the size of government, stop spending money the city does not have. NO NEW TAXES.

  6. For months I have been saying higher taxes are coming and here they are.

    During the Mitchell Administration the city budget has more than doubled and the City Council has approved each one. Again the ball is now in the City Council’s court. The question is will they continue to be a rubber stamp and approve the mayor’s budget like in previous years, making minimal cuts to say they did something, and than go on to pass the budget burdening the taxpayers.

    Or will this year be different and the City Council will finally do their job for the residents that they all boast about at election time and finally stand up for the people and say enough is enough, NO MORE NEW TAXES.

  7. They had plenty of money for the train. Meanwhile there’s no money for snow removal and fixing the streets.
    They can start by cutting down on the number of trips the train makes. It is so wasteful and unnecessary to have a train make so many trips back and forth when there’s absolutely no demand for it.

    1. Absolutely NOT! Just because you don’t need the train doesn’t mean there should be less trips. Riders use it work, saving connection driving. The need for doctors in Boston! I don’t have kids I’m 64, I have to pay for schools, I pay the same insurance as someone who has kids! How about they stop taking money out of intended areas. How about stopping the waste in spending for the schools!

    2. You: I don’t use the train therefore there’s no demand.

      Meanwhile, thousands of people besides yourself actually do use it.

  8. No one is surprised that Mayor wants more money again. Over his tenure his administration has more than doubled the city budget ($270 Million to $550 Million) and year after year the City Council has approved them.

    How can we move forward, when this political body (the Mayor and Council) continue to expand city government, fund nonprofits, spend money it does not have, and continue to raise taxes?

    The higher taxes plays a big part in not having new economic growth when businesses can go to area towns and start a business and pay less taxes. So this means the city gets no new jobs and no new tax revenue to contribute to the city budget,

    So here we are again with our backs against the wall, will the City Council continue to be a rubber stamp and approve the mayor’s budget like in previous years, making minimal cuts so they can say they did something, and than go on to pass the budget burdening the taxpayers?

    Or will this year be different where the City Council finally stands up against the Mayor’s budget request and does the job for the residents that they boast about at election time. Will this Council finally stand up for the people, say enough is enough, make cuts across the board, and NOT RAISE TAXES.

    More than ever our State and City needs New Leadership and New Vision for the future.

  9. Our city lost 68 million dollars from the American Rescue ACT that the city had received in fiscal year 2026 that we won’t be receiving in fiscal year 2027. This loss along with less State and federal aid could bring the real deficit loss to well over 100 million dollars, with no new revenue sources. This is painting a bleak picture for the future of our city. Once again you can’t keep running a city on the backs of businesses, homeowners and residents that lease (renters). People are leaving our city at an ALARMING RATE. SHAMEFUL.MAYOR MITCHELL DO US A FAVOR STEP DOWN AND LET SOMEONE TAKE YOUR PLACE THAT KNOWS FINANCE AND CAN MAKE THE TOUGH DECISIONS.

  10. With our backs are against the wall, the present City Council does not know how to say no, that is why I called them a RUBBER STAMP. With the news from the Council President this morning that our taxes are going up and CUT NIGHT IS NOT EVEN HERE, NO FIGHT, JUST LAY DOWN, AND RAISE TAXES. New Bedford needs the recall provision, 100% we need new leadership in city hall, and our city residents deserve a better vision for our future.

  11. As reported by the New Bedford Light on December 11, 2025

    A report from the auditor’s office showed that for the 2025 fiscal year, which ended in July showed New Bedford with a $4.8 million surplus plus another $8.5 million from better-than-expected tax receipts, this comes to a roughly $13 million total surplus.

    As reported by the New Bedford Light on April 7, 2026

    In a letter Chief Financial Officer Bob Ekstrom regarding the upcoming city’s budget outlook, New Bedford, Ekstrom forecasted, could be seeing a $15 million deficit in the next fiscal year, which could potentially obligate the city to raise the tax rate.

    So taking a look at this, the surplus of $13 Million Dollars is gone, and we now have a 15 Million Dollar Deficit, adding both together shows city spending of $28 Million Dollars. So the facts show that if we had political leaders that had some physical responsibility and financial restraint there could’ve been no deficit or at least a minimal hit to the taxpayers.

    100% we need new leadership in city hall and a better vision for our city’s future.

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