Fiscal Year 2018 Recommended Budget

Beginning July 1, 2017 and ending June 30, 2018


Executive Summary

"I am proud to put forth a budget that makes strategic investments to support Boston's neighborhoods, and builds on our strong record of fiscal management." - Mayor Martin J. Walsh

Mayor Martin J. Walsh today presented his Fiscal Year 2018 (FY18) budget proposal, a plan that balances sustainability and increases investments in key initiatives and more fully supports Boston's neighborhoods. The proposed budget:
  • builds on the Walsh Administration's strong fiscal management record;
  • maintains high levels of support for educating Boston's students and keeping the City of Boston safe;
  • expands upon strategic initiatives to achieve cost savings; and
  • positions the City to manage through instability at the national level.

Introduction

Mayor Martin J. Walsh’s proposed $3.14 billion Fiscal Year 2018 (FY18) budget balances sustainability, increased investment, and fiscal responsibility. Continuing trends seen in recent years, the Mayor’s proposed FY18 budget relies on growth in property tax and other local receipt revenue, but requires control of growth in departmental spending to offset weak state aid revenue and high fixed cost growth. Budgetary growth is maintained at a responsible level given the need to maintain flexibility in the face of continuing uncertainty at other levels of government. Despite these challenges, the budget makes strong statements about the City’s priorities, as is reflected in the proposed investments.

Expanding on savings

Even with strong growth in locally derived revenues, it is only through continued tightening within City departments that the City will be able to afford new and expanded investments after reserving for costs associated with collective bargaining, being assessed for its increasing charter school costs, funding its pension obligations, and paying its debt service.

The FY18 proposal builds off of past budgets by expanding savings initiatives, and allows for dollars to be used in high impact areas.

Federal challenges

Mayor Walsh’s FY18 budget stands in contrast to national efforts to dismantle the urban safety net, as seen in the proposed Federal budget. The President has proposed to eliminate critical federal programs that support the production of affordable housing, revitalize Boston’s Main Streets, make heating bills affordable to 20,000 Boston residents, and provide Boston students with valuable after-school programs.

Taking advantage of data

In contrast, Mayor Walsh is proposing data-driven investments that meet the core needs of Bostonians, including:

  • targeting research-backed education investments - including extending the school day for 15,000 students - to close achievement and opportunity gaps;
  • directing educational resources to students most in need, including 3,000 BPS students experiencing homelessness;
  • building on early success from the Mayor’s homeless action plan implementation;
  • further extending access to addiction treatment services;
  • using data to change the way Boston deploys emergency services to Boston Common and Recovery Road;


  • making sure that city streets in every neighborhood are clean and safe with revitalized lane markings and crosswalks;
  • continuing efforts to diversify Boston’s Police force by adding police cadets;
  • ensuring that Boston’s open spaces are among the nation’s most equitable and accessible;
  • supporting local artists through grantmaking and residencies;
  • launching infrastructure projects driven by Imagine Boston 2030 and Go Boston 2030, moving from engagement and planning to action; and
  • setting funding aside for future projects coming out of the BuildBPS engagement process and partnerships with the Massachusetts School Building Authority (MSBA).
Three students all looking at a computer

Extending the school day

Working to close achievement and opportunity gaps


City approach vs. federal approach

The City’s data-driven investment and spending reform approach to budgeting illustrates an alternative to the type of budget being contemplated at the Federal level. The City’s spending approach continues to emphasize the preservation and expansion of offerings to our most vulnerable residents, made possible by the implementation of strategic reforms.

In this budget, the City is avoiding $60 million in costs through reforms implemented since Mayor Walsh’s first budget.
These strategic savings initiatives allow Boston to meet its fixed cost obligations and make targeted investments in a thriving, healthy, and innovative city. Conversely, the President’s proposed budget would eliminate valuable programs aiding some of our most vulnerable residents.

Effects of state and federal budget

Boston faces increased uncertainty due to national and state level challenges. In addition to federal budget proposals to eliminate over $24 million in Community Development Block Grant funds flowing through the City of Boston, the President has signed an executive order aimed at cutting funding for “Sanctuary Cities,” and has supported health care legislation that would have created over a $1 billion hole in the Commonwealth of Massachusetts’ budget. Further federal divestment from its Public Housing Authority is also possible, and reduced federal education grants to serve students in poverty have been proposed.

At the state level, Boston continues to struggle with the Commonwealth’s underfunding of the Charter School Tuition Reimbursement, from which the City is projected to lose $25 million in FY18 alone.

Maintaining fiscal discipline

Cities cannot afford to replace this level of funding cuts, and Massachusetts communities, with revenue tightly constrained by state law, will be particularly challenged in the event of federal or state divestment. This instability from the federal and state level requires increased stability and strong fiscal management at the City level. Mayor Walsh’s FY18 budget continues the fiscal discipline that was recently praised by rating agencies by:

  • paying down the City’s long-term pension and other post-employment benefits obligations;
  • managing personnel and health costs;
  • continuing savings initiatives;
  • maintaining conservative fiscal management policies; and
  • maximizing revenue from local receipt sources.

In their credit rating affirming Boston’s AAA rating with a stable outlook, Moody’s wrote:

"The AAA rating reflects the city's strong fiscal management and stable financial position."

Disciplined financial practices have better positioned Boston to manage through changes in state and federal policy and funding levels.


Expenditures

FY18 expenditures are increasing by $143.7 million (4.8%) over FY17 budgeted expenditures. This reflects 4% appropriation growth and 8% fixed cost growth. Of that growth, 40% is dedicated to education 38% will go to all other City Services (such as Police, Fire, and Public Works) and the Public Health Commission, and the remaining 22% of growth will be consumed by pension, debt service and other fixed cost expenditures.


Imagine Boston Capital Plan

Over 14,000 Boston voices shaped the Mayor’s vision for Boston in 2030. They envisioned a city that will expand opportunity for all, support a dynamic economy, enhance quality of life, and prepare for climate change.

From idea to action

Imagine Boston 2030 identifies key areas where Boston can take action to:

  • enhance neighborhoods’ vitality;
  • encourage mixed-use job centers;
  • provide spaces for new housing and jobs as we grow;
  • create a waterfront for future generations; and
  • connect historically underserved neighborhoods to more opportunities.

Mayor Walsh’s $2.08 billion FY18-FY22 Capital Plan moves Boston residents’ priorities from idea to action, and invests in creating the city Bostonians imagine for the future. Under the Imagine Boston 2030 umbrella, the City is investing deeply in the core goals of BuildBPS, Go Boston 2030, Boston Creates, and Climate Ready Boston.

Investing in core goals

Mayor Walsh’s $2.08 billion FY18-FY22 Capital Plan moves Boston residents’ priorities from idea to action, and invests in creating the city Bostonians imagine for the future. Under the Imagine Boston 2030 umbrella, the City is investing deeply in the core goals of BuildBPS, Go Boston 2030, Boston Creates, and Climate Ready Boston.

  • Mayor Walsh committed $1 billion over ten years to bring Boston's school buildings into the 21st Century, and this Capital Plan launches that investment with funding for 21st Century Classrooms, MSBA Accelerated Repair Program partnerships, completion of projects in the pipeline, and reserves for future projects coming out of BuildBPS community engagement.
  • Boston, in collaboration with State and Federal sources, will invest $709 million over the next five years in implementing the core initiatives outlined in Go Boston 2030: streets that are safer for all users of our roads and sidewalks, particularly pedestrians and cyclists; travel that is more reliable and predictable; and quality transportation choices that improve access to interconnect our neighborhoods for all modes of travel.
  • Through the use of Winthrop Square proceeds, City capital dollars, and leveraging external funds, Mayor Walsh plans to carry out early actions to implement Imagine Boston 2030’s Open Space goals, including investing in Franklin Park as a keystone park for the city, completing the Emerald Necklace, and restoring Boston Common to its full vibrancy.
  • Boston will prepare for climate change by investing City dollars and outside funding to develop more detailed climate plans for Boston neighborhoods, especially those most at risk for coastal flooding, as recommended in Climate Ready Boston.
  • The Percent for Art Program, funded for the first time in this Capital Plan, demonstrates the City’s leadership and commitment to sustainable funding for the arts by setting aside one percent of the City’s annual capital borrowing for the commissioning of public art.

With investments in roads, bridges, schools, libraries, parks, firehouses, and community centers, the Imagine Boston Capital Plan touches each neighborhood and shapes a City that over 14,000 voices told us they want to see.

View the Capital Plan

FY18 Budget Priorities

Building on Mayor Walsh’s record of achieving improved outcomes across the City’s services - from education to housing, basic city services to the arts - the Mayor is proposing data-driven investments that are aimed at creating a thriving, healthy and innovative city. Operating budget investments are made possible due to the smart savings initiatives the City has pursued over the past four years. Through the Imagine Boston Capital Plan, the Mayor is making new capital investments in Boston’s schools, roads, bridges, parks, libraries, community centers, fire stations and other community assets to build the City that Bostonians imagined.