$1B budget gap warning heeded
While the Wu administration has downplayed its findings, city councilors indicated that they’re taking seriously a watchdog report that points to a $1-billionplus budget gap brought on by Boston’s eroding commercial tax base in five years.
Citing concerns with the long-term impacts of vacant downtown office buildings on the city’s commercial tax base, which, along with residential property taxes, make up roughly threefourths of annual budget revenue, the Boston City Council chose to move forward with two proposals aimed at looking further into the matter.
“What it shows is that the Boston City Council is taking this issue seriously,” Councilor Ed Flynn said of a non-binding resolution he put forward that passed the body, 12-0, yesterday calling for the creation of a blue ribbon commission that would study strategies in filling downtown office vacancies.
Flynn was joined by Councilor Brian Worrell in putting forward proposals that were responsive to the findings of a February report issued by the Boston Policy Institute, which projected a $1.2-$1.5 billion revenue shortfall in five years, driven by COVID-era work practices that have left office buildings largely vacant.
The report laid out a scenario where residents could be left with higher taxes to make up for a loss of revenue brought on by office space values that are expected to decline 20-30% and commercial real estate prices that are expected to fall 12-18% by 2029.
Boston’s commissioner on assessing, Nicholas Ariniello, disputed the findings of the report upon its Feb. 15 release. The city has “not seen any indications from the real estate market that would translate to a loss of revenue” or budgetary concerns, he said, but it is keeping a “close eye” on the matter.
Flynn said that while appreciates his remarks and has “great respect” for Ariniello, “with these reports of alarming budget shortfalls on the horizon, we cannot afford to wait and see before reacting to a fiscal crisis.”
“Oftentimes government waits to react to a crisis in hopes that the music will never stop,” Flynn said. “But it’s critical we take proactive steps now in order to be prepared for any and all issues regarding potential revenue.”
Flynn said he envisions a blue ribbon commission composed of business leaders, city and state officials, neighborhood activists and other relevant experts to study the impact of, and make recommendations to fill, office vacancies to ensure the “long-term economic viability of Boston.”