A Budget at Risk: How Office Market Decline Could Undercut Boston’s Public Services

Researchers are predicting revenue shortfalls for the City of Boston due to the collapse in office values. Boston’s budget continues to grow, making it crucial to understand how revenue will keep up. The Boston Policy Institute found that commercial property taxes make up one-third of the city’s tax revenue. Commercial real estate values are expected to decline 20-30 percent by 2029, resulting in a revenue shortfall of $1.2-$1.5 billion in the coming five years. Boston leads the nation in its reliance on property taxes as a primary source of income, making it particularly vulnerable to what the Boston Policy Institute has described as “the new normal.” 

Figure 1: Property tax collection in the city of Boston as a share of total revenue by fiscal year, illustrating a growing reliance on property taxes for revenue. Data is from the Boston Policy Institute. 

Overtime Spending and the BPD: 

With the potential for future revenue shortfalls looming, it has become more important to scrutinize potential areas of overspending. The Boston Police Department (BPD) has often been criticized for recurring issues with overtime pay. Some argue the 52 officers resigning and the increase in voluntary retirements from the department are a result of the pandemic and police killing of George Floyd. But while the department did have a decline in employment from 2019 to 2023, as seen in Figure 3, overtime spending has been a concern for decades.  

Recently employment has rebounded. The department saw a 16 percent increase in employment from 2023 to 2024 according to Pioneer’s Boston DataLabs. Employment is now significantly up over the past 12 years, with overtime increasing alongside it. However, the BPD and police unions maintain that staffing levels for officers are still inadequate, falling about 500 officers short of the 2500 minimum. Therefore, the number of officers does not meet the current demand for public safety services. 

Most workers in the BPD get paid overtime. Of the 25,531 Boston city employees listed, 57 were paid more in overtime than their regular pay, with the majority working for the BPD. Boston Police Department Lieutenant Stanley Demesmin consistently made the most in overtime from 2021 to 2024, earning $223,774 overtime pay in 2024 while his regular pay was $161,306 with inflation adjusted. The 30 city workers paid the most overtime in 2024 worked for the Boston Police Department, apart from Keith Barry, a wire inspector in the Inspectional Services Department. Meanwhile, the average regular pay in 2024 was $78,310 inflation adjusted, a decline since its peak of $87,104 in 2020. 

Figure 2: Boston Police Department employee count and number of employees paid overtime from 2015 to 2024. Data from Boston DataLabs. 

Figure 3: Boston Police overtime pay from 2014-2023, adjusted for inflation. Data sourced from Boston Globe. 

In 2024 the BPD spent $577.98 million; overtime consisted of $103.22 million, or about 18 percent of total expenses. This is an increase from the $88.5 million in overtime pay in 2023 but a decrease in overtime as a percentage of the overall budget (21 percent in 2023). The shift in expenses is likely the result of higher total employment for the department. The BPD had an average of 56 percent more employees working overtime than the Boston Fire Department. According to the Boston Globe, however, the department still faces media scrutiny on overtime fraud scandals led by federal investigations that resulted in the conviction of nine officers. Department practices also contribute to high overtime costs, such as mandatory minimum overtime payments. 

Takeaways: 

Trends in regular and overtime pay highlight ongoing workforce pressures in Boston as revenue concerns grow. The BPD has accounted for a significant amount of overtime spending, calling into question the sustainability of staffing levels and scheduling practices over the long term. As fiscal uncertainty grows, it is essential to align department spending with strategic goals to maintain financial stability and public services moving forward. 

Erin Moran is a Roger Perry Government Transparency Intern with the Pioneer Institute. She is a rising senior at College of the Holy Cross, majoring in Political Science. Feel free to contact via LinkedIn.