Impact of Shifting Budgetary Responsibilities in Boston
- Financial instability – The rating agencies consistently cite Boston’s strong management, conservative fiscal policies and budgetary performance as reasons for the City’s AAA bond ratings. This in turn allows Boston to continue funding a capital plan that addresses the many needs of residents from housing and parks to public buildings and infrastructure at a sustainable cost.
The City’s record of successful financial management going back decades, as evidenced by consecutive operating surpluses, AAA bond ratings since 2011 and easy access to debt markets even in difficult fiscal times, was made possible through the current structure of budgetary authority that also provides for a checks and balance procedure that is important to the stability of the City.
This Order divides budgetary responsibility among the City Council and Mayor, injecting uncertainty in Boston’s fiscal management which threatens the City’s financial stability and bond ratings, and thus the City’s ability to fund capital projects. Furthermore, this Order brings instability and the promise of building a budget that is artificially low and/or possible expenses being cut that will not come to fruition and therefore the City will be forced to deficit spend. A strategy that will not be looked on favorably by the rating agencies and will not be good for the future of Boston and businesses operating in the City.
- Greater level of uncertainty – this Order re-distributes budgetary power in Boston. The final say for spending rests with 13 individual City Councilors. The Mayor will have limited response to the needs of citizens. Citizens who elect a Mayor based on a specific platform or promises of changes and priorities, have a greater chance of not seeing those initiatives come to fruition if the City Council is not in favor.
- Not shared budgetary powers – under this Order the City Council can override the Mayor’s veto of any budget and line item. The Mayor has no recourse, even if the electorate has expressed other opinions. If the City Council decides to defund any Mayoral priorities they will have the power to do so. This new process is more likely to create a bureaucratic impasse around critical funding issues.
- May seem like a vote for democracy, but no – this new budgetary process tends to favor those with strong social power. The nine district City Councilors will no doubt represent what is good for their individual districts. Those who have the time and are able to advocate for what they want in the city’s budget will have a strong-hold on City Councilors. Boston’s budget will effectively be in the hands of non-elected individuals with their own agendas to fulfill.
- Equity will not be improved – The Order ensures that strong voices will be heard, and competition among 13 City Councilors will be a fact of life. With each Councilor vying for the projects or funding that their particular constituents are lobbying for – not necessarily what is good for the whole city. Poorer neighborhoods or less vocal neighborhoods would be left behind.
- Accountability would be blurred – This Order calls for decentralized leadership in Boston’s government. Decentralization makes it difficult to hold one person accountable. Citizens are able to express their like/dislike of the actions of the Mayor during the very democratic electoral process. However, the electorate can only vote in/out for just their district City Councilor. Any strategic direction set by the Mayor at the beginning of the year (via State of the City address) can be upended by the City Council during the setting of the budget.
- Special Project funding – this proposed structure is not based on a strategic use of taxpayers’ dollars, instead the process reallocates money to special interest projects of the most vocal groups in a district. Undoubtedly, some of these projects will be worthy of funding, but the decision to fund would not be made with the whole interest of the City in mind nor the impact on the department that would be foregoing funding.
- Chaos in the budget process – This Order places Councilors vying for funding for the projects in their districts against each other, with the expectation that it will be done. Additionally, existing departments and programs will be met with considerable instability as each program could be decimated during the Council’s new process with no recourse by the Mayor.
- Limited Capacity of the City Council – This Order would challenge the budget capacity of the City Council. Boston’s operating and capital budgets are being developed long before the April budget deadline for presentation to the City Council. At $6.61 billion, this process is complex and involves hundreds of employees, financial experts and the financial teams in Administration & Finance, Budget Management, Auditing, Assessing, Treasury, BPDA, Retirement Board, Law, Intergovernmental Relations and in every department, board, committee and commission to develop revenue estimates and determine the amount of non-discretionary expense that will be required in order to create guidelines for developing individual departmental budgets. The City Council structure and central staff is not prepared to execute this type of analysis and evaluation or forecasting.