Mayor Walsh’s March 2016 Address to the Boston Municipal Research Bureau

Thank you, Matt [Kiefer], thank you Sam [Tyler]. Thank you everyone for supporting the Municipal Research Bureau. I’d also like to thank Bob Gallery for his service as the Chair of the Boston Public Library Board of Trustees, as well as new trustee Cheryl Cronin. And I’d like to introduce some new team leaders in the City of Boston.
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Will Morales is the Commissioner of Boston Centers for Youth & Families, overseeing our city’s 29 community centers.

Monica Valdes Lupi is the executive director of the Boston Public Health Commission. Sara Myerson is Planning Director at the Boston Redevelopment Authority. John Hanlon is Commissioner of Property Management. Carl Spector is Commissioner of the Environment Department.
Edward O’Donnell is the Director of Real Estate at the Boston Redevelopment Authority. Lauren Jones is Director of Business Strategy for the City of Boston. And Donny Tavares is our Chief Diversity Officer.

These talented individuals are thinking creatively about the function and performance of the key agencies they are leading. Together we are not only striving to improve City services, we are looking for ways to continue moving Boston to the next level.

That’s not just ambitious rhetoric these days. Our year began with General Electric deciding to move its global headquarters to Boston. G.E. is one of the largest companies in the world. Just as important, it is turning its vast resources to building the digital infrastructure on which the 21st-century economy will run. So I agree with those who say G.E. is a sign that Boston is moving to the “next level.” For decades, we saw corporate headquarters leaving town. Now we’ve turned the tide — and in a big way.

But the truth is, our progress goes beyond any single company or industry. Boston at the next level is a city that makes it easy for employers of all kinds to open up shop, and to grow here. It’s a city that creates good-paying jobs for a wide range of skills and helps train people to fill them. And it’s a city that leverages this growth to take our schools, our quality of life, and our community to a new level. So to get there, we have to align our economic strategy, our budget investments, and our community values. That’s what we’ve been doing, and that’s what I want to talk about today.

Two years ago, in my first major policy address, I came before the Bureau and laid out my administration’s economic plan. I said Boston is growing, but we can’t rely on the status quo to keep moving us forward. We have to make our own destiny. And that’s what we’ve done.

We went out to recruit new business, pitching Boston from New York to Seattle, and from Ireland, to Israel, to China.

For the first time, we brought the strength of Greater Boston to this work, by signing a Regional Economic Development Compact with 6 neighboring cities and towns.

We embraced small business, with an expanded Main Streets program and a brand-new startup initiative called StartHub.

We made permitting easier, building a modern website and reducing turnaround times by a week the first year and another 2 days last year.

We kept the development pipeline open as we continue to transform the culture of the Boston Redevelopment Authority.

We invested in arts and culture and public space, to be a more creative and welcoming city.

We fostered a more vibrant nightlife, by removing pointless restrictions on restaurants, bars, and entertainment venues.
And we launched a citywide planning effort called Imagine Boston 2030, to shape our future as a community.

I’m pleased to report back, two years later, that this comprehensive strategy has gotten results. Global brands like Primark, Converse, AutoDesk, and Lego chose Boston. Groundbreaking companies like Wayfair, LogMeIn, and Emulate have expanded. Startups like Hourly Nerd, Art Lifting, and Freight Farm have begun to change their industries, and grow their payrolls. Small businesses like CommonWealth Kitchen in Dorchester and Tremendous Maid in J.P. have brought jobs and services to neighborhoods. This year Boston’s total assessed property reached a record valuation of $128 billion. And $7 billion of development is currently under construction.

This growth has been good for the City’s finances. Last week, Moody’s and Standard & Poor reaffirmed our perfect bond ratings, citing both strong management and a strong economy.

This is also why we have continued the longstanding practice of using tax incentive tools in special cases. These agreements are not expenditures, but net positives that unlock new taxable developments. That’s why I’m confident in our agreement with GE. Independent of its untold ripple effect on our economy, it will increase City revenues. That’s how we’ll structure it. That’s how we’ll implement it. And that’s why rating agencies agree, calling it a “credit positive” event for the city, that diversifies and strengthens our tax base.

The close link between economic development and City revenues is especially clear at this time of year, when I prepare to submit a budget to the City Council. Commercial property tax is our #1 revenue source. That’s more true today than ever, due to declining federal and state aid.

So I’d like to put to rest the notion that our pro-active growth strategy comes at any cost to schools, parks, affordable housing, or other vital investments in community wellbeing. The very opposite is true: we depend on new development to fund City services at the level they deserve.

I want to say a few words about our School Budget in particular. At 1 billion, 13 million dollars, we spend more on the Boston Public Schools than ever before. Education funding is as large a portion of our overall City budget as it has ever been, more than all other departments combined. This year, I have proposed a $13.5 million increase. That will make nearly $90 million in new funding since I took office, and a $232 million increase since 2008.

I’m proud of our strong commitment to education. The Boston Public Schools spend more per student than any other major district in the country. But it’s my duty to make sure this commitment is sustainable. And at the moment, longstanding structural challenges are coming to a head. Consider that since 2008:

Assessments for charter schools have increased by $87 million, with another $13 million increase projected this year.
Over the same period, state education aid has declined by $3 million.
Meanwhile, labor costs have risen by $141 million.

And we have maintained building space for 93,000 students in a district whose enrollment has declined to 57,000.
As I said in my State of the City address: we need to tackle these challenges as a community.

That’s why I’m appealing to the Legislature to replace a broken charter school financing system. As I testified at the State House yesterday: the proposed ballot measure does not address this financing crisis, or enrollment issues, or facilities challenges. If rejected, it leaves us on the unsustainable path we are on. And if passed, it would make things dramatically worse. I support charter schools, and I’m not against their growth. But we need the kind of comprehensive fix that only the Legislature can provide.

I’m also appealing to teachers for their partnership, as we enter collective bargaining season. Teachers in Boston are well paid, and they deserve to be. But we have to work together to make sure our system-wide labor costs are sustainable; and that Superintendent Tommy Chang has the flexibility he needs to move our district forward.

I appeal to parents and community members as well, to engage our building plan with an open mind. We are prepared to make significant capital investments. But they only make sense if we can do a better job matching our facilities footprint to our student population.
Finally, I am working closely with Superintendent Chang, to eliminate administrative inefficiencies that have built up over many decades in the Boston Public Schools.

I know uncertainty in the budget process causes great concern. And I appreciate that people care deeply about their schools. I care deeply about them as well. That’s why our proposed budget increases per-student funding, even while adding pre-kindergarten seats, and making advanced work curriculum available to more students.

The truth is: BPS schools have not paid the price for our growing charter assessments. But every other City department has. It’s a structural tension in our budget that is steadily building to a crisis. I ask for everyone’s support and input in solving it.

Our economic strategy doesn’t take away from this work, but advances it. Growth generates the revenue we need to sustain our schools, as well as roads, parks, and all our public goods. At the same time, those shared commitments create the conditions for new growth. Just as we depend on revenues from development to fund public priorities, growth itself depends on forward-looking public investments.

It’s a cycle that has been the key to Boston’s progress. Consider the history of the Seaport District. Investments from the Ted Williams tunnel to the Convention Center anchored the District in the innovation economy. Public-private partnerships unlocked key developments, from the Institute of Contemporary Art to Vertex. Dozens of private projects followed. The result has added many millions of dollars to city revenues: from $16 million in 2005 to $85 million in 2015, and up to $101 million in Fiscal Year 2016. These revenues in turn support schools, parks, affordable housing, and public safety all across the city.

This growth also supports infrastructure investments we know are needed to help the Seaport reach its potential. That’s why we are inviting creative ideas for the Northern Avenue Bridge. We are working with the state, Massport, and other stakeholders on a transportation plan for the district. And we continue to urge our state partners to invest in the MBTA. Public transit is not just an amenity, but a foundation of economic growth in our region.

In the meantime, we are tackling traffic congestion. Using data from our partnership with the Waze app, we made signal adjustments that reduced traffic jams by 18% at key intersections of Seaport Boulevard and Atlantic Ave.

Behind the story of the Seaport is an even longer one — going back to city, state, and federal investments in our downtown core in the 1960s; and to the Central Artery and 3rd Harbor Tunnel projects of the 1990s. You can even trace it to the filling of the Back Bay in the 19th century. Far-sighted public interventions set the stage for our city’s success.

This is also the reason we are seeking re-authorization of the City’s Urban Renewal program, in 14 of the original 23 zones. Urban renewal tools unlock projects with transformative public benefits. They are projects that the private market by itself cannot produce. But they bring ongoing private investment in their wake.

I want to be clear what these projects look like today. In the 1960s, they involved large-scale redevelopment for a city that was struggling. They brought us our skyline, but didn’t give enough attention to the rights of existing communities. By contrast, for many years now, urban renewal has served only development sought by communities — such as Dudley Square, the Charlestown Navy Yard, Whittier St. Health Center in Roxbury, and small businesses on Washington Street in the South End.

That’s why, for more than a year, we have held by far the most robust public process in the 67-year history of this program: 12 public meetings; over 100 stakeholder meetings; 5 public sessions at the City Council; a website; and a joint exhibition with the West End Museum, to keep the lessons of history squarely in the front of our minds. It’s truly a new day at the BRA.

We are working with the City Council to re-authorize urban renewal in a way that continues and grows this transparency. But our current authorization expires in April. If we don’t meet this deadline, we risk losing powerful tools for positive community development. Projects at key sites, such as Tremont Crossing in Roxbury and Bunker Hill housing development in Charlestown, hang in the balance.

These are projects we need, to continue the tremendous progress we have made tackling the housing demand faced by our growing city. With 30,500 new units either built or in the pipeline, we are at nearly 58% of our Housing Plan’s goal of 53,000 units by 2030. Each year, we have increased the number of affordable homes in these totals, including 35% of the units approved last year.

Under our new Inclusionary Development Policy, we are poised to go even further: to provide more affordable units, and also incentivize the middle-market that is so vital to our workforce.

I’m also pleased to report that our Housing Innovation Lab is ready to launch new pilot programs aimed at the diverse needs of the middle market. They include: zoning relief for middle-class housing; a small unit design roadshow with the Boston Society of Architects; technical help for community nonprofits to set up land trusts; and a financial technology program for home buyers. With support from the Bloomberg Foundation, we’ll assess the results and build on what works.

I want to conclude by touching on some of what’s next for next-level Boston.

In economic development, we’re building on success. We are taking the creative and collaborative approach that brought G.E. here, and making it a permanent strategy. We are also creating a new Office of Small Business Development, to consolidate existing services and be more responsive to the diverse needs of this key sector.

In city operations, data and technology are having transformative effects. In the month of February, we finished installing digital payment technology in all of the city’s 8,000 parking meters. Already, nearly two-thirds of all parking meter payments are being made electronically. And in our new 311 system, over 50% of constituent reports are now coming through digital channels.
More than adding convenience, these new systems are driving better performance. Take CityScore, our brand-new scoring system for city services. In just 3 months:

CityScore revealed that we weren’t notifying residents when traffic signal repairs are complete. We fixed that.
It also showed we had a backlog in sign installation. So we cleared it.

And it allowed us to change the metric for late-trash pickups from days to hours. It’s literally made Boston’s sidewalks cleaner.

Data is helping us tackle inequality as well. A labor market study from our Office of Workforce Development reveals, among other things, that the lowest-paying jobs in our city tend to be held by city residents, while better-paying positions go to commuters. This data and more will help to inform the work of the $15 Minimum Wage Task Force we are currently forming.

In addition to our data innovations, we have added another layer of creativity with our new Artists in Residence program. Inspired by a University of Chicago Business School model, we’ve hired artists to bring their unique perspectives to city agencies, from the Boston Police Department to the Office of Recovery Services.

Perhaps most important of all, we are preparing and welcoming the next generation of innovators, from young professional networks, to college campuses, and right down into our high schools.

I was pleased to announce yesterday that the Forbes Under 30 Summit is coming to Boston this fall. And later this month, we’ll welcome the National Society of Black Engineers. These are major national conventions that we did not often get in the past.

I also want to thank the business community for working to make sure our leadership in higher education is a source of strength in our economy. Today I’d like to recognize the New England Venture Capital Association for Tech Generation, a program that places thousands of area college students in tech company internships. This morning, they launched a new online tool for matching students with employers. They’re helping keep more of our homegrown talent in this growing field.

Finally, I want to thank all the employers who participate in our nationally renowned Summer Jobs program: from the hospitals and financial firms that hire hundreds of teens, to the startups that have volunteered to take 1 or 2. We are always expanding our outreach: most recently, through a new partnership with LinkedIn and the White House. I want to once again appeal for new employers to sign up. Just visit www.bostonsummerjobs.org. It’s the most concrete and rewarding way you can help Boston align our economic growth with our educational vision now, and for the future.

The young people in our schools and colleges will inherit our Next-Level city. If we give them a strong start, one day we’ll watch them take it to a new level all their own. Thank you, and God Bless the City of Boston.



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