FY24 Local Revenue
Local revenue comprises 14.6% of the City's revenue budget in FY24, similar to its share in FY22.
Local revenue includes revenue from excise taxes, payments-in-lieu-of-taxes, licenses and permits, fees and fines, investment income, and available funds. The City collected $549.1 million in FY22, a 28.9% increase from FY21. In FY23, $451.0 million is budgeted for these sources. For FY24, the City is budgeting $624.9 million, anticipating that the local economy, and economically-sensitive revenue sources with it, will build on the current strength of the post-pandemic recovery.
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Still have questions? Contact:
Budget
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1 City Hall Square
Room 813Boston, MA 02201-2037
Overview
Local receipts, or revenue the City is able to generate locally, include items like excise taxes, fees, fines, and permits. This vital revenue source generally follows the City’s overall economic health and is projected to increase by $173.6 million or 27.8% in FY24.
Although recent economic trends are encouraging, caution remains necessary due to geopolitical events and macroeconomic pressures. In FY24, the 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-FY21 are actual collections, FY23 and FY24 are budgeted 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, levied on occupancy of hotel rooms, motel rooms, and short-term rental units. In addition to the local tax, the State collects a 5.7% excise tax and a 2.75% fee, transferred to the State’s convention center fund, for a total tax from all sources of 14.95%.
The FY23 budget was set at $54.0 million in local room occupancy collections due to the dramatic economic impact COVID-19 had on travel and tourism. The FY24 budget assumes a sharp rebound in these industries, with $124.5 million in room occupancy excise.
Other excise taxes that have been affected by COVID-19 and that are likewise expected to make gains in FY24 include:
- Meals - 0.75% local excise on meals
- Jet fuel tax - 5% of the average sales price, but no less than five cents per gallon
- Motor vehicle - an excise in lieu of property tax on motor vehicles, $25 per one thousand dollars of vehicle valuation
See below a table with all excise taxes the City collects.
The table below LISTS all excise taxes levied in the City:
| Categories | FY22 Actual | FY23 Budget | FY24 Budget | Difference in $ | Difference in % |
|---|---|---|---|---|---|
| Room Occupancy | $75,470,253 | $54,000,000 | $124,500,000 | $70,500,000 | 130.6% |
| Motor Vehicle | $60,802,975 | $53,575,000 | $54,090,000 | $515,000 | 1.0% |
| Meals | $29,409,214 | $22,000,000 | $35,000,000 | $13,000,000 | 59.1% |
| Aircraft Fuel | $22,848,966 | $19,000,000 | $36,000,000 | $17,000,000 | 89.5% |
| Vehicle Rental Surcharge | $872,872 | $750,000 | $1,000,000 | $250,000 | 33.3% |
| Marijuana Excise | $1,013,109 | $1,000,000 | $2,150,000 | $1,150,000 | 115.0% |
| Condominium Conversion | $644,500 | $550,000 | $600,000 | $50,000 | 9.1% |
| Short Term Rental | $551,532 | $400,000 | $530,000 | $130,000 | 32.5% |
| Boat Excise | $30 | $0 | $30,000 | $0 |
Impact of COVID-19
The increase projected in local revenue comes after these sources fell a combined $190 million, or nearly a full third, between FY19 and FY21. Even with strong recovery in FY22 total local revenues, some individuals accounts may take years to fully recover.
In FY22, Boston dedicated $55 million of its American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) to replace municipal revenue lost as a result of the COVID-19 crisis. The City decreased funding used for this purpose to $40 million planned for FY23. Given the strength of the recovery in local revenues, the City is not anticipating the use of ARPA funds for revenue replacement in FY24. In FY24 the City estimates that local receipts will exceed pre-pandemic totals.
To learn more about the City's plans for its federal relief funds, visit Boston's American Rescue Plan page.
Learn more about the Budget
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Still have questions? Contact:
Budget
-
1 City Hall Square
Room 813Boston, MA 02201-2037
