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More than any other city on the East Coast, Boston is addicted to property taxes. Could the Hub be hitting a crippling tax-levy ceiling soon?
In 2012, collections on homes, buildings, and private infrastructure will feed more than 65 percent of Boston's $2.4 billion budget.

It's 2015. Foreclosures have left Boston's outer neighborhoods gutted, and homes virtually worthless. Downtown, property values have also dropped, triggering sharp declines in commercial activity. The budget has been gutted, and reductions in essential city services are noticeable. Teacher, fire, and police contracts that were negotiated in 2011 and 2012 continue to bleed resources, as baby-boomer pension costs increase at exceedingly higher rates than the city's available finances.

>> CHART: Beantown counters: Boston's addiction to property taxes <<

It's a doomsday scenario, sure. But it's one that becomes more and more likely as Boston's residential values continue to tumble, as they have since the 2008 housing-market meltdown. Experts have been saying for years that the economy will rebound, but so far they've been wrong. And there's more at stake here than real estate — the Hub's budget hinges on how much your home is worth.

More than any other major East Coast city, Boston relies on business and residential owners to pay for things like jakes and teachers. One critical observer says the budget is "like an animal that we have to keep feeding" with property-tax levies; in 2012, collections on homes, buildings, and private infrastructure will feed more than 65 percent of Boston's $2.4 billion budget.

That's feasible right now. But in the next five years, Boston could hit the ceiling for how much property tax it can extract under state law. In the uncertain interim, some say that prospect should raise concern on several fronts:

* Though Boston businesses still pay the lion's share of property taxes, city assessors, out of necessity, have gradually shifted more tax burden onto homeowners for nearly a decade. That affects everyone from downtown millionaires to low-income renters.

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City sticklers
Steps inside the entrance of 152 North Street, exposed electrical boxes dangle out of a demolished drop ceiling. Dust fills the light beams bouncing through the hallways. There's a layer of gray soot fused into the tiles of the bathroom.  

Steps inside the entrance of 152 North Street, exposed electrical boxes dangle out of a demolished drop ceiling. Dust fills the light beams bouncing through the hallways. There's a layer of gray soot fused into the tiles of the bathroom.

This dilapidated dump is home to the city's two-person Finance Commission, which oversees — or tries to oversee — virtually every dollar of the $2.4 billion budget flowing through city channels. If a public-works hack is sleeping on the job, executive director Matthew Cahill and financial analyst Michael Levangie are supposed to expose him. When money goes missing, they're supposed to find it. And that's all in addition to inspecting the several thousand contracts the city awards each year.

The Finance Commission, better known as FinComm, has been City Hall's unwanted stepchild for more than a century. As a state-appointed, city-subsidized body charged with scrutinizing municipal finances, the commission is perceived by many within city government as an unwelcome entity — a last vestige of ancient measures to keep Boston within Beacon Hill's clutches. (FinComm's five part-time board members, who do little outside of monthly meetings, are appointed by the governor.)

Throughout its history, the commission has rooted out municipal corruption and waste and saved the city millions of dollars. In 2007, for example, Cahill went undercover in a graveyard to bust an exploitative superintendent of cemeteries. In 2009, the commission highlighted citywide waste on building maintenance and overtime, and exposed former Redevelopment Authority officials for taking quarter-million-dollar pensions and using their positions to steer business.

This month alone, FinComm stopped Boston Public School (BPS) contracts that would have cost our strapped city tens of thousands in frivolous expenditures. In one case they discovered that Dearborn Middle School proposed to pay a consultant a whopping $243 hourly rate for leadership training. The contract was rejected.

"I'm sure that I'm pissing off a lot of people — many of whom won't admit it," says Cahill. "That's what I'm here to do — I come in every day and ask myself what taxpayers would think about all of this."

But FinComm remains understaffed and underfunded — it will receive less operating money from the city next year than it did a decade ago, and Cahill currently has no administrative support.

As a result, the commission is hamstrung. Just keeping up with the torrent of paperwork is a daunting task that has Cahill and Levangie busy into most evenings and even weekends.

"There might be a day when someone tells me that I have to keep my mouth shut if I want to keep my job," says Cahill. "In that case, I would be gone — it's not worth it. Until then, the plan is to keep doing as much as I can with [the resources] I'm given."

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