Fiscal Year 2018 Budget

Beginning July 1, 2017 and ending June 30, 2018

Last updated: 4/13/17

Pensions, debt service, and other fixed costs

Finally, $32 million (22%) of the budget growth is committed to addressing the City’s long-term obligations and paying off debt taken on for school buildings, roads and bridges, police and fire stations, parks, and other public assets.

Due to generations of underfunding the City’s pension obligations, the City’s pension schedule requires a 9.5% increase this year. This budget again dedicates $40 million toward reducing the City’s long term other post-employment benefits (OPEB) liability.
Actively addressing the City’s long-term liabilities is not only fiscally responsible, it is critical to maintaining Boston’s AAA bond rating, which unlocks additional capacity to fund more capital projects.
Debt service costs

The City borrows every year to support investments in its roads, bridges, school buildings, parks and police and fire stations. Based on its AAA bond rating, the City has continued to benefit from favorable interest rates and its position as an attractive investment. This high bond rating will be integral to unlocking a $1 billion investment in Boston schools over the next 10 years.

Even with the recent favorable borrowings, debt service costs are projected to increase by $10.6 million (6.1%) in FY18.