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During the pandemic, there are revenue question marks for Boston

Part of the Boston skyline was captured during a recent sunset.
Part of the Boston skyline was captured during a recent sunset.Lane Turner/Globe Staff

Amid a still-rampaging COVID-19 pandemic and suggestions from city councilors that Boston is facing a projected shortfall, the city’s budget director said this week that given the fiscal uncertainty, the city may continue cost-saving measures undertaken earlier this year, including a hiring freeze and a suspension of “non-essential” city purchases.

Justin Sterritt, the city’s budget chief, said despite the unknowns, he does not expect layoffs or service reductions to be necessary for a balanced budget this fiscal year, which started in July and runs through June 2021. The city directly employs more than 18,000 people across 60 departments.

Still, questions loom.

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During a phone interview this week, Sterritt pointed to the state delaying the remittance of excise taxes, which gives the city “a little bit less insight” into how its coffers will look.

Regarding revenues, Sterritt said, “We have a limited insight into what the shortfall will be until we actually see the returns come the spring.”

Sterritt added that when the city built this year’s budget, it banked on the economy slowly opening up over time and while the city has done a lot of work to help businesses get back on their feet, “Obviously the virus is still with us.”

In June, the Walsh administration said its revised $3.61 billion operating budget proposal accounted for a projected revenue loss as a result of the coronavirus.

This week, Sterritt said the city will continue to review its options regarding spending during the fiscal year. Property taxes, which the city relies on for more than 70 percent of its revenues, continue to show strength and are coming in higher than expected, he said.

“Some of the projections we had may not come to pass on some areas of the budget and some budget areas are coming in better than expected,” said Sterritt, who did not attach any numbers to revenue projections during a Wednesday phone interview with the Globe.

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On Monday, a city council ways and means committee hearing, two city councilors suggested the city is facing an estimated $50 million budget gap, something Sterritt flatly denied during the interview later in the week.

Said City Councilor Michael Flaherty, “We learned the other day from the budget director that as of right now, due to COVID, we’re about $50 million behind budget, so very problematic, obviously, as we move forward and start to talk about sort of a post-COVID world here for Boston and making sure that the level of basic services that residents and taxpayers have come to expect is maintained.”

Later in the meeting, Councilor Kenzie Bok, who chairs the ways and means committee, said “as Councilor Flaherty alluded to, citywide, we’re at least $50 million in the red for the year.”

Councilor Michelle Wu, who is running for mayor, said Thursday the city needs to plan “for a recovery in an equitable and sustainable way.”

“From the city’s perspective, yes, we are going to see many of our traditional revenue sources fall short, but that does not mean that we can cut back on providing the supports that our residents need,” said Wu.

Mayor Martin J. Walsh hasn’t said if he’s running for a third term next year.


Danny McDonald can be reached at daniel.mcdonald@globe.com. Follow him on Twitter @Danny__McDonald.