Janey administration officials this week unveiled a $3.75 billion budget for the city’s 2022 fiscal year and detailed a plan they say will avoid layoffs or service cuts while setting the stage for an “equitable recovery” from the economic contraction caused by Covid-19 over the past year.

Overall, city budget officials project that revenue will grow modestly in FY22, but still remain below pre-pandemic levels. Meanwhile, steady property tax streams and a large influx of federal dollars will help fund a recovery plan targeting schools, small businesses, and hard-hit sectors of the economy like arts and tourism. 

Justin Sterritt, director of the city’s Office of Budget Management, told reporters during a Tuesday briefing that Boston entered the pandemic in a “very strong fiscal position” and was considered “one of the cities best prepared” for an economic downturn. A strong foundation anchored by property tax, commercial development, and home sales “remains the core of the FY22 budget, and it’s something that we’re really thankful for in Boston,” said Sterritt.

“If you look at counterparts in other cities, other parts of the state, a lot of them are in the process of making cuts; we are not in that position, we maintained full services and programming although in a safer way. We did not do layoffs, we did not do program reductions; in fact, we actually built many new programs and services that we hope to grow and continue further in this budget.”

The budget team was able to avoid cuts thanks in part to a projected 125 percent increase in “non-recurring revenue”— such as federal grants and relief funding— for FY22. Boston was awarded $435 million through the American Recovery Act, which will come in over the next five years. 
The biggest losses in city revenue came as a direct result of the pandemic, which saw vital tourism and travel dollars dwindle.

“We definitely felt the most Covid pinch when it came to our local revenue sources like excise taxes, parking fines, and hotel taxes,” explained Sterritt. “Some of that will rebound into next year, but it will be a slow process,” he said, projecting a “long-term recovery” for the city’s hospitality and tourism industries. 

The FY22 operating budget sets aside its biggest chunk—41 percent, or $1.5 billion— for public education. Next is public safety at $675 million (18 percent); followed by fixed costs at $533 million (14 percent), which grew by 10 percent over last year in order to cover fully funded pensions, Other Post Employment Benefits (OPEB), and Debt Service.

New budget methodologies and processes for FY22 include an “equity framework” introduced through a partnership with the Equity and Inclusion Cabinet that “formalizes an equity analysis through data for budget decisions.” In addition, the budget department collected “Equitable Procurement Plans” from every city department.

Notably, a “Safety, Justice and Healing” slide of the presentation detailed the city’s response to calls for police reform, including $1 million earmarked for the Office of Police Accountability and Transparency to staff a Civilian Review Board and Internal Affairs Oversight Panel; $1.75 million for Health and Human Services to develop an “Alternative Policing” plan; and a $21 million, or 33 percent, reduction in police overtime compared to a FY21 spending level of $65 million.

Additional changes made based on recommendations from the city’s Police Reform Task Force include growing the size of the force by 30 officers and increasing the number of cadet recruits from 40 to 60, as well as a $1 million investment for racial equity training and $2 million to maintain additional Boston Emergency Services Team (BEST) Clinicians, who respond to mental health crises along with police. 

The total BPD budget has been pared down to just under $400 million for FY22, in comparison with last year’s appropriation of $414 million. However, as Boston’s police and fire departments are allowed to exceed their annual funding levels, police in reality received $421 million in FY21, a spike that Sterritt chalked up to increases in retirement, medical leave, and more frequent details related to elections and protests. The $21 million reduction is mainly comprised of overtime cuts and was made in reference to last year’s real spending total of $421 million.

Finally, a series of “Recovery, Reopening, and Renewal” investments will put nearly $40 million toward post-Covid relief efforts, including youth jobs, the Age Strong commission, substance use and mental health supports, housing and homelessness, and economic development for hard-hit industries like the arts, tourism, and small businesses.

Janey’s proposed budget was set to be submitted to the Boston City Council on Wednesday. The council typically holds hearings to review the budget before voting to approve or oppose it in the coming weeks.