FY20 Local Revenue

The City’s second largest source of revenue is Local Revenue, comprising 16% of the recurring revenue budget in FY20.

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Local revenue includes revenue from excise taxes, payments-in-lieu-of-taxes, licenses and permits, fees and fines, investment income, and available funds.

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Overview

Local receipts, or revenue the City is able to generate locally, includes items like excise taxes, fees, fines, and permits. This vital revenue source generally follows the City’s overall economic health and is projected to grow by $49.4 million or 9.9% in FY20. This category also represents the City’s limited opportunity to pursue new and expanded revenue streams and target that revenue towards important new projects.

In FY20, the entire Administration & Finance Cabinet will continue to work with departments citywide to review collections, understand revenue drivers, and maximize revenue recovery efforts.

The graph to the right shows the share of each category within this revenue source.

Recurring Local Receipts by Type

FY19 and FY20 are budget amounts.

Excises

An excise tax is a tax applying to a specific industry or good.

The largest excise tax collected for the City is the local room occupancy excise, a 6.5% tax levied on occupancy of hotel rooms, motel rooms and short-term rental units, starting July 1, 2019. The new 6.5% rate is a 0.5 percentage-points increase, proposed and accepted as part of implementing the Commonwealth’s new Room Occupancy Excise Law and in accordance with the City’s local ordinances.

This increase is projected to raise $5 million in new revenue, targeted to be invested in initiatives to create supportive housing and to create housing and employment pathways for youth and young adults, as part of the Mayor’s plan to end chronic and youth homelessness:

$4 million to create 50 new units of permanent supportive housing
$1 million to create pathways for youth and young adults experiencing homelessness

The table below LISTS all excise taxes levied in the City:

Categories	FY18 Actual	FY19 Budget	FY20 Budget	Difference in $$	Difference in %
Room Occupancy	$94,010,606	$92,000,000	$97,000,000	$5,000,000	5.4%
Motor Vehicle	$66,882,454	$52,000,000	$55,000,000	$3,000,000	5.8%
Meals	$30,930,632	$29,000,000	$30,500,000	$1,500,000	5.2%
Aircraft Fuel	$28,835,362	$15,750,000	$23,000,000	$7,250,000	46.0%
Vehicle Rental Surcharge	$1,553,089	$1,500,000	$1,500,000	$0	0.0%
Condominium Conversion	$969,500	$500,000	$500,000	$0	0.0%
Boat Excise	$57,311	$40,000	$40,000	$0	0.0%

Fees and Fines

Parking Fines

In FY19, the City made a strategic set of increases to the previous parking fine structure, designed to reduce congestion and emissions, increase cleanliness, and improve the parking experience.

The updated parking fine structure is expected to produce positive outcomes by influencing driver behavior and reducing congestion in high-traffic areas. Data through March 2019 shows a 7% decrease in ticket issuance.

Parking Meter Fees

The City is proposing to expand the City’s Performance Parking Program in order to reduce congestion in high traffic areas and increase parking turnover in neighborhoods and business districts. Changes include:

Increasing the meter base fee from $1.25 to $2 per hour throughout the City
Increasing meter fees at the Bulfinch Triangle and Fenway/Kenmore, designated as high demand areas, to $2.50 per hour
Simplifying rates in the Seaport with the highest demand areas lowered to $3.75 per hour and the average block set to $2.00

This proposal would generate approximately $5M in new revenue, targeted to be re-invested back into creating equitable streets for all. Investments include a capital investment in the Walkable Streets program to reconstruct sidewalks equitably in neighborhoods across the City and capital funding to accelerate the design and construction of the City’s major bike corridors, mostly around downtown lanes.