Property Tax Revenue Vulnerability to Flood Risk in Boston

• In Event: Performance Management under Fiscal Distress

Abstract

The City of Boston has an outsized and high reliance on property tax revenue for its own-source revenue, ranking 3rd out of 75 major U.S. cities regarding property tax reliance for the year 2022 (Lincoln Institute of Land Policy & Minnesota Center for Fiscal Excellence, 2025). With over 70% of Boston’s own-source revenues currently coming from property taxes, the city risks losing some amount of their largest source of revenue from projected flood events. Boston has high exposure to flood events, which will only become more commonplace and extreme due to climate change. Even if government officials, emergency planners and responders, and the communities are successful in safeguarding the population from such events, the destruction of the property tax base—buildings, homes and physical property generally—will leave the city with a severe financial crisis.The primary research question for this analysis is: What is the impact of flood on Boston's property tax revenue base? This question includes considerations about varying impacts based on a number of variables, such as flood probability level, neighborhood, and land-use type. Secondary questions include: Without some or a large percentage of its primary revenue source, how will the city fund its programs? What programs are likely to get cut first? Will the city diversity its revenue sources to prepare for flood probabilities? What are the equity implications?To assess these questions, this analysis preforms a vulnerability assessment utilizing quantitative data and a mixed-methods approach. Data utilized include FY24 Property Assessment data from the City of Boston, shapefiles of the parcels for assessed properties, and the Massachusetts Coast Flood Risk Model (MC-FRM) 1% flood probability layers for the 2030, 2050, and 2070 projected years, made available through the Massachusetts Office of Coastal Zone Management (MA CZM). This analysis uses ArcGIS software combined with further quantitative analysis in GIS-extracted data. ArcGIS is used to identify Boston FY24 assessed parcels impacted by flood as determined by the MC-FRM 1% probability layers, which are then extracted to preform additional quantitative analysis focusing on land-use type, Boston neighborhood, and other coded features.The overall findings show that even as soon as the 2030 MC-FRM 1% probability level, there are significant potential risks to Boston’s fiscal health. The 2030 projection shows ~18% of total FY24 revenues at risk from property tax revenue exposure to flood; with commercial being the most impacted land-use type and the Seaport being the most impacted neighborhood in terms of total dollar amount and percentage of city property tax revenue exposed. The discussion examines a few possible impacts and outcomes from the findings related to how Boston may in the future attempt to make up for property tax revenue loss due to flooding, including 1) tax increases and changes, 2) spending cuts, and 3) other considerations. Such possible policy responses from the City would have crucial implications on what programs are funded, increased tax burdens on property owners and renters, and likely disproportionate impacts on low-income groups to make up for revenue losses.

Author

• Christina Moroney-Ebarb, University of Massachusetts at Boston
  Presenting Author