Boston City TV, MA Office of Budget Management, 12 Apr 2022

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From YouTube: FY23 Funding Sources

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Legendas na Kriolu sa disponivel.

The Office of Budget Management discusses how general fund revenue, capital revenue, and federal funds support the FY23 Recommended Budget.

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Welcome to the fy23 recommended budget.

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This video provides a brief overview of how the city of boston will fund the fy23 budget,.

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Including general fund revenue,, capital, revenue, and american rescue plan, act, or arpa, funding.

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For more information on the transformative investments, this budget makes,, please see the companion video on investments.

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Let's start with how the city funds its annual operations.

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Boston is required to produce a balanced operating budget in which total general fund of revenue equals total expenditures.. The city collects a variety of revenue sources that make up the general fund..

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The fy23 general fund revenue budget totals $3.99 billion,.

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An increase of $216 million or 5.7%.

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Over the current fiscal year.

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here,, you can see a breakdown of revenue sources as a share of the total budget,, as well as changes between fy22 and fy23..

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The first major revenue source is property tax,.

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Which is the largest and most stable source of revenue for the operating budget. property tax revenue provides 74% of total general fund revenue.

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every year,. The city is allowed to increase its property tax levy by 2.5% per state law.

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In fy23, this will add an additional $71 million,.

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Which you can see on the left in red., an additional $60 million, will come from new growth,.

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Which comes from value added to the property tax base through new construction and renovations., you can see new growth in green., adding on an additional adjustment to cover property tax abatements,.

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This brings the projected fy23 increase in property tax revenue to $154 million or 5.5%.

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In raising revenue through the property tax,, the city is mindful of minimizing cost to residents.

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The city shifts the property tax burden from residential to commercial classes of property and offers the maximum allowable residential exemption.

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The result is a homeowner tax bill that is a full 30% lower.

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Than the statewide average.

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The next largest source of revenue for the city, state aid, makes up just over 12% of the general fund revenue and comes from the massachusetts governor's budget.

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in fy23,. State aid will be increasing by roughly $16 million or 3.4%.

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While the increase is welcome,, the city evaluates state aid on net,, meaning the aid remaining after subtracting assessments that we have to pay. The state.

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assessments are shown here in red, and include costs such as the mbta reimbursement and tuition costs for boston students, attending charter schools..

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The green trend line shows this net state aid,, which an fy23 is only a slight increase from the last year.

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In fact,, state aid has fallen over $300 million or 70%.

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Over the last 20 years, when it made up 30% of the city's general fund., this has increased reliance on property taxes and other revenue. Sources.

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boston will continue to advocate for greater state aid in this and future years..

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Another major revenue source is local receipts,, which is made up of four categories..

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The first category is excises on the far left.

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These are taxes assessed on specific goods,, such as motor vehicles,, hotel stays and restaurant meals.

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They account for 4% of the general fund, and are projected to increase by $42 million or 73%.

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In fy23,, reflecting a healthy rebound in our local economy from the pandemic., the next three categories are typically grouped in a bucket called, departmental revenue..

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This bucket consists of licenses and permits,, which includes building permits, fines,, which are mostly parking tickets, and other departmental income,, a catchall category that includes revenue like the payment in lieu of taxes, program and interest on city investments.,.

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Together, these three categories represent about 8% of the general fund, and are expected to grow by $18 million or 6% in fy23..

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As you can see on this chart, local receipts,, the blue bars, were disproportionately impacted by the covid-19 pandemic..

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The combination of excise and departmental revenue fell, $190 million, or nearly 1/3 between fy19 and fy21..

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Thankfully, communities are allowed to use arpa funding,, which we will discuss later in this video, to replace revenue lost as a result of covid-19.

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Moving on to capital revenue., while the general fund revenue, we discussed funds, the city's operating budget,, the city's capital plan is funded differently due to the nature of capital investments..

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The city maintains a large inventory of capital assets that are funded in the capital. Plan,, such as our roads,.

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Bridges, parks, and municipal buildings.

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Boston's $3.6 billion five-year capital plan is financed.

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Through a combination of sources., the largest source of funds is the city itself..

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Nearly 73% of the capital plan is funded through the sale.

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Of general obligation, bonds that are paid off over 20 years,.

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Which you can see here in blue. a general obligation bond means this is a type of credit.

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Where the full faith and credit of the city is pledged to repay the principal and interest on the bond.

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The city also supports the capital plan with other revenue sources,, such as the parking meter and surplus property. Funds.

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state and federal grants, here in yellow and green, contribute 19% of the revenue that supports the capital plan. with a strong economy, aaa bond rating, and balanced operating budget,.

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The city will issue bonds totalling $1.6 billion over the next five years,, which will finance hundreds of new and ongoing projects,, including the construction of new schools, libraries, community centers,, protected bike lanes and affordable housing.

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The last major revenue source for funding our transformative fy23 budget is federal, arpa funding.

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Boston expects to receive over $558 million.

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From the american rescue plan act and coronavirus, state and local fiscal recovery, funds,.

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Which will help us respond to the economic and health impacts of the covid-19 pandemic.

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The funding can be used to support direct covid-19 response, supplement lost city revenue.

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As previously discussed, help stabilize boston's businesses.

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And families, and address systemic challenges that have contributed to the unequal impact of the pandemic.

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To date,, $149.5 million have been appropriated.

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By the boston city, council, and $409.2 million remain to be allocated.

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Across these funding sources,, the city is able to make transformative investments to address boston's greatest needs in a fiscally responsible way.

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to learn more about funding, boston sources and investments,.

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Visit our website, budget.boston.gov, or the arpa website at boston.gov/recover.