Fiscal Year 2019 Budget

Beginning July 1, 2018 and ending June 30, 2019

Last updated: 7/1/18

Local Revenue

The City annually collects a significant amount of recurring revenues other than property tax or State aid. The City collected $518.5 million in FY17 from these sources. The City expects to exceed the mid-year budget estimate of $491.1 million in FY18 and collect $505.6 million in FY19


Breaking down local receipts

Many of the City’s local receipts are sensitive to existing economic conditions and the City takes a cautious approach when estimating local receipts.

With limited revenue tools, the City is continuing an initiative in the FY19 budget to better maximize the local revenue tools. This City will also work to maximize federal health insurance reimbursements and address past due bills to recover revenue.

The following is a brief description of selected local receipts and their expectations for FY19:


Excises

  • Motor vehicle excise revenue began to recover in FY14 and has remained steady with the strengthening economy. Revenue is estimated at $52.0 million in FY19.
  • The Commonwealth granted municipalities a new 0.75% local option tax on restaurant meals beginning October 1, 2009. The City expects to collect $29.0 million from this tax in FY19.
  • Hotel excise revenue benefited from an FY10 rate increase from 4% to 6%. The City expects to receive $92.0 million in FY19.
  • Jet Fuel excise collections are expected to remain level at $18.0 million in FY19.
  • The City of Boston adopted a 3% local option sales tax for the sale of recreational marijuana, effective July 1, 2018. The FY19 Recommended Budget includes $2.25 million in new revenue for the marijuana local option sales tax.
  • As result of 2016 state legislation to create a per-ride assessment collected from transportation network companies (TNCs), the City expects to receive $2 million in FY19.
  • The vehicle rental surcharge is a revenue-sharing arrangement with the Commonwealth. Under this arrangement, all vehicle rental contracts originating in the City are subject to a $10 surcharge. The City receives $1 of this surcharge. The City budgeted $1.5 million in FY19 for vehicle rental surcharge revenue.


Other Sources of Local Revenue

  • The revenue from Interest on Investments is estimated to increase to $5 million in FY19. The increase is a result of the movement of significant assets out of non-interest bearing accounts associated with compensating balance agreements between the City and its primary bank and into interest-bearing accounts. Additionally, in June 2018, the Federal Reserve increased its key interest rate to 2%, the highest level since 2008.
  • License and permit revenues have been strong with the robust activity in the City’s development pipeline. Building permit revenue is conservatively budgeted in FY19 at $45 million.
  • The FY19 budget includes an additional $1.3 million identified in departmental revenues.
  • Building on his commitment to create a safer, more equitable transportation future for Boston, Mayor Walsh will invest $5 million aimed at upgrading transportation infrastructure to benefit all modes of travel. These investments are funded through a strategic set of increases to the City’s current fine structure for parking violations. The updated parking fine structure, last revised in 2008, is expected to produce positive outcomes by influencing driver behavior and reducing congestion and emissions, increasing cleanliness, and improving the parking experience.
  • The remaining sources of recurring revenue to the City are set rates of fees, fines, penalties and interest. These usually endure economic changes with small changes in activity or revenue.


Available Funds

    Most of the City’s General Fund budget is supported by the revenues that are estimated to come in during the course of the fiscal year, including property tax, excises, State aid, and the various other categories of revenues described above. Available funds are linked to a separate category of expenditure appropriation - those supported by immediately available fund transfers.

    The only two significant available funds that the City generally budgets each year are parking meter revenues to support the Transportation Department, and cemetery trust monies which are used to support the City’s maintenance of its public cemeteries. Both special funds have fees collected during the course of the year. By transferring out less than what is collected over the years, the City has built up the balances in these funds. Trust fund balances, such as the cemetery trust, also benefit from the opportunity to invest in securities offering a higher return than short-term fixed-income investments. The City did not transfer any funds to the General Fund in FY16 or FY17. The City expects to transfer $22.5 million from the parking meter fund to the General Fund in FY18 and FY19. The City also plans to transfer $950,000 from the cemetery trust fund to the General Fund in FY18 and in FY19.