Document Type

Research Report

Publication Date

6-1985

Abstract

The word "deficit" has dominated the most recent 35 years of Boston's fiscal history. This report probes the experience and lessons of this history in order to propose a more permanent resolution of Boston's financial difficulties.

Three deficit categories are identified and analyzed: appropriation deficits, revenue deficits and overlay deficits. Over the past 35 years, the City has had 12 years of appropriation deficits, 19 years of revenue deficits and 28 years of overlay deficits. In each year the City's budget was certified as in balance. Deficits became a way of life. Fortunately the overlay deficit problem, except for the potentially expensive utility cases, has been overcome through revaluation. The appropriation and revenue deficits remain tobe eliminated.

The report distinguishes between structural imbalances and operating deficits. Structural imbalances are attributable to impositions on Boston of service responsibili ties that are unique or of disproportional scale among cities of Boston's population class. They include costs that are mandated by the historical patterns of service and cost allocation as between the Commonwealth and its cities and towns, and costs that may be explained by the special role that Boston fulfills as the state's capital city, as the economic and cultural center of the New England region and as a major entry point and way station for successive waves of foreign immigration.

Conversely some of the City's financial difficulties represent operating gaps that occur because spending exceeds available resources. They indicate political and/or managerial inability or unwillingness to operate within the limits of expenditure/revenue plans. They also reflect the failures or absence of adequate fiscal planning and management systems and controls.

 
 

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