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Even the greatest city in the world can get better, Walsh says

In his annual State of the City address, Mayor Walsh declared that "the city of Boston is as strong as it's ever been," but he laid out several proposals to make it even better and to keep Boston at the forefront of cities in which residents look out for each other and help each other out.

Walsh emphasized schools and assured those listening that "the Boston Public Schools ARE my priority." But in remarks that seemed aimed at pro-BPS parents who protested outside Symphony Hall before his speech, he added that he is equally committed to students at the city's non-BPS charter schools. And enough, already, with pitting schools against each other, he said.

Tonight, I'm calling on everyone to come together to back all our children, all our teachers, and all our schools. That means fair and sustainable funding for both district and charter schools. It means exploring a unified enrollment system that could help families and level the playing field among schools. This spring we will deepen the enrollment conversation, to address challenges in special education, language services, discipline policies, and transportation.

Walsh, who said he wakes up every morning amazed that he's living the dream of being mayor of "the world's greatest city," said it's time to ensure universal pre-K across the state - and called on state legislators and the governor to step up and increase funding to ensure that.

Education will also prove key to improving job opportuntities for young Bostonians, he said, adding he will continue to push apprenticeships and other programs that can get them into good jobs. However, he did not mention Madison Park High School, the city's only vocational school.

Walsh said he will convened a task force to look at how to get a $15 hourly minimum wage for Boston.

He said he will continue to work towards increasing the city's housing stock for the middle class:

New homes will help bring costs back to working people's budgets. But many just want a fair deal where they live right now. Last year, we doubled the compensation people get when their apartments are turned into condos. But we should do more than compensate. We should help people stay in their communities. Tonight, I can announce a new Office of Housing Stability, to do just that. It's going to develop resources for tenants, incentives for landlords who do the right thing, and partnerships with developers to keep more of our housing stock affordable.

He added:

I am so proud to announce: we have ended chronic veterans' homelessness in Boston. And we are working every day to end all chronic homelessness by the year 2018

He also patted the city on the back for building a new homeless shelter to replace all the beds lost when Long Island was suddenly shut.

Walsh noted that crime statistics - except for shootings - continues to drop in Boston, even as the number of arrests drop as well.

What that means is we are becoming a safer city not by locking people up, but by lifting people up.

But noting the increase in shooting, he said action is needed nationally:

Americans agree on common-sense gun reforms. In Boston, we are showing how to turn consensus into action. So we'll keep working with cities and states, with experts and survivors, with gun dealers and owners. And we'll keep building trust in the community every day.

He concluded by asking Bostonians for their help.

We are breaking new ground and offering new hope. We are proving that when Boston comes together, when we truly act as one community, we can change our city, and change the world. We've been doing it for a long time. From the first public library to the first Office of Recovery Services, Boston is a city on the cutting edge of the common good. We can do the same for urban education-if we come together. We can do the same for housing, income, and wealth inequality-if we work together.

That's what I ask each of us to commit to, tonight. Bring to the table not just our own wants, but a vision for our common welfare. Find common ground, even when we don't agree on everything. Protect what we love about our city by, sometimes, embracing change.

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Comments

speach?!

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Thanks, fixed.

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It's a valiant effort to promote affordable housing and help for young folks like myself. Unlike some of the international students flocking here, we're unfortunately not born into wealth nor able to easily afford $3000 condos. Also good to help on homeless issues. The Combat Zone maybe gone but its remnants are still lingering...

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So long as speculation and investment from people who aren't residents is allowed there will not be an increase in affordable home prices discounting what happens in economy.

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"there will not be an increase in affordable home prices discounting"

Gobbledygook.

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See the next post for a more lucid explanation.

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You can't build enough to reduce the housing cost problem, and Boston should try to preserve it's interesting architecture and neighborhoods. There is a big demand for investment properties from here and elsewhere. There needs to be restrictions on the amount of residential real estate that people who don't live here full time can speculate on. It has a big impact on the local housing market and has been documented many times by the Boston Globe and other papers.

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The best tool the city has to promote homeownership is the residential exemption. It knocks almost $2000 off your property tax bill, if your house or condo is owner occupied. The exemption amount is capped by the state. If that cap is lifted, then the city could really do something to shift residential property from investors to homeowners.

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And those same investors will shift the increased cost of the real estate taxes to their tenants by increasing the rents.

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will drive renters into home ownership as it is cheaper. I just saved $100/month by buying a house, and it's not a falling down rat hole like my previous rental. CRAZY!!

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The timeline of the exemption is also awful for someone buying from an investor.

I bought in February 2014 from an investor. The state rules around residential exemptions mean that it was not until this January that my residential exemption was reflected in any way on my property tax bill. That is absolutely ridiculous.

The residential exemption should kick in immediately if you file a declaration of homestead with your deed. Otherwise, it is much better to buy from a current owner-occupant than from an investor.

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Technically even that isn't true. If you buy your house on February 1 of this year, the entire exemption for 2016 still "belongs" to the seller, not to you the buyer.

Most real estate attorneys will try to prorate it, but the seller can show up at closing and say "no, I'm keeping the exemption for myself" without violating the sales agreement.

Massachusetts property laws are hundreds of years old. Laws were drafted long before Zillow, computers, typewriters, ballpoint pens, even carbon paper. They go back to a time when records were kept in heavy, oversized books. Tax law hasn't kept up with technology, so the whole property tax system still has month-long and year-long delays built into it. Many of those delays could be shortened to weeks.

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The residential exemption actually discourages home ownership in probably 80-90% of Boston. It's not an exemption from taxes. It's a shift of taxes. Who pays?

a) anyone that rents (most of the taxes are passed on to landlords who pass this on to their tenants)
b) anyone that owns a home assessed over the break-even point (currently around $1.2 million I think - this is a fairly small percentage of the overall "shift" though - so you aren't really hurting these people- also not very kind to long term residents of gentrifying neighborhoods where prices are rising rapidly)
c) anyone that owns a lower end home - because if you pay less taxes - it's likely you'll have to use that money to lever up your mortgage or you are not going to win the bid and get the house - because the next guy will.

Who wins? Who else:

a) the banks - because this forces people to bump up their mortgages (and they have to come up with a bigger down payment and larger closing costs)
b) the realtors - it drives up prices - meaning bigger commissions
c) the developers - who can sell their homes for higher prices
d) people who live and own in homes valued from about $400k - $700k

In other words - this law screws about 90% of the city to the benefit of a very small percentage who own homes valued in a narrow window

*Father Zryini was my freshman economics professor who went to great pains to teach us how government subsidies of all types drive up prices of goods and services.

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Blast from the past - I also studied econ. with Father Zryini at Georgetown U.

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he was awesome

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That's not how it works. Every owner occupied home is eligible for the exemption. Even for John Kerry's $10 million mansion it can knock $2k off a $100k tax bill.

The big loser with residential exemptions is landlords who forfeit the exemption.

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If you eliminated the exemption the tax rate would actually be about lower maybe $1-2. So people owning a home exactly at the value of the exemption get the full value in the lowering of their tax rate. However, as I noted, those "savings" don't get banked - you have to effectively use it to lever up the property with a bigger mortgage as part of a better offer (I'm assuming most - especially in a market like this, because if you don't the next guy will and you won't get the house. (granted -the exemption is only $178,000 and I don't think many properties are valued that low).

So - for example (I am making up the numbers for the example - if the value of your house is $178k - with the exemption you would pay no property tax - although there is a minimum - used to be $500 - may higher now. Without the exemption, the rate would be maybe $9 instead of $11. So you would owe $1600 - you save about $135 a month (excluding the concept of the minimum for this explanation)

Say you own a property worth $678k. Well - without the exemption the rate would be $9 and you'd owe $6100 in taxes. However, with the exemption and the current rate you owe $550 - so you save $50 per month.

At some point there is a crossover - let's use $1.178 million property for an example. With no exemption, you would pay a bit under $11k in taxes. With it you pay exactly $11k - effectively no difference.

Really expensive properties do pay more - but very little in the scheme of things. I'd estimate 80-90% is passed on to landlords - and then their tenants driving up costs for the 70% of Bostonians that rent.

I've literally given public seminars on this with senior members of the assessing department in the audience - I guarantee you that's how it works - and why it's a scam. The few people that MAYBE get a benefit - assuming they didn't have to pay a little more to get their home in the first place, end up netting a few hundred dollars a year.

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Stevil

A few pieces of information from American Factfinder, owner occupied housing makes up 33% of housing stock, not 30%, and the number of residents in owner occupied housing is 204,363 or 36% of the total 571,380 housing population. So by your Stevil math, which was "screws about 90% of the city" it would be more like "screws about 64% of the city".

But I can understand your misinformation around housing in Boston considering that you live in the Back Bay/South End, a neighborhood with sky high price points for years now. But not every house in Boston falls into one of your brackets and I am someone that lives in a "lower end home" by your Stevil standard of less than $400,000. Sure it is only a 3 bed/1 bath (not a condo) but it suits our family of four fine and we love Neponset. But hey, we can't all be high-rollers in the "narrow window" of "$400,000 - $700,00" home owners.

And in this Stevil proclaimed "narrow window" that is so small, maybe I have been looking at Trulia and Redfin incorrectly for the past six years because a majority of houses for sale in Dorchester, Roxbury, Mattapan, Jamaica Plain, East Boston, West Roxbury, Roslindale and Hyde Park seem to fall in that price point. (Honestly I have not looked for a single family home with 4 bed/1.5 bath in Beacon Hill, Back Bay, Fenway, A/B, Chinatown, Southie or Charlestown.) So I guess about half of our neighborhoods are the "small percentage who own homes in a narrow window" huh? That seems confusing to me, how can 50% be a small percentage?

Third, how do you feel about the MA tax code that lets renters claim up to $3,000 of their rent on their taxes? Do you think landlords do not include that in setting rent? Would landlords decrease rent if they knew that renters weren't claiming it? Do you think we should change that tax law? Or is that a "shift of taxes" as well?

I'm just a simple guy and maybe I have read the City of Boston website incorrectly. The website states that the exemption for Fiscal Year 2016 is $1,961.58 or 30% of average value of all residential property. Anyone that lives and owns in the city is eligible. But I am still confused as to how this is a "shift of taxes"? Are you making the presumption, because that's what is, that landlords increase rent to cover their loss of a $50 a month exemption? Do you have proof of this claim? Are rents going up at exactly $50 a month each year based on the average value of housing? Could landlords be increasing rent based on demand and not $1961 exemption? Or is the "scam" that the city seeks to collect taxes in other places and not from homeowners? How is it "a scam"? How am I being scammed if I am saving $50 a month? I am not being sarcastic, just asking your POV.

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Get back to me when you understand the difference between housing units and population.

Then get back when you understand how the residential exemption works.

In the meantime, FYI, you got screwed by this law and don't even know it. I won't go into the math again - but understand that the tax rate would be lower if there were no exemption. The more expensive your home, the less value the exemption has up to I think around $1.2 million where the exemption has zero value. For homes above that it has a negative value.

Here's the rub. Let's say your actual value to the $2000 exemption is $1500 for a home worth $300k. That's $125 a month. You and your "competitor buyer" both decide to bid on a house that's worth about $300k. You say - the house is worth $300k, so you bid that and decide - hell the value of the exemption is a bonus, I'll just put it in my pocket. The other guy thinks - well, if I can save $125 a month with this exemption thing, I'll just use that to get a bigger mortgage and bid up the price of the house to $325k, assuming he can come up with the extra down payment, closing costs, points etc. Guess what - you're still renting and the other guy gets the house. Without that exemption built in - you both bid $300k and the one that brings the owner cookies gets the house.

I don't think people are sitting at their kitchen table running these numbers. The market sorts it out as people figure out how to get the best house for their money (same thing for the deductible rent which also drives up rents - although out of pocket it's probably a wash). On a 5% tax - it's $150 and I'm not going to sweat it.

In the end - especially in a competitive market - people are including the value of the exemption in their estimate of what they can afford to bid. The lower the cost of the home, the bigger the percentage premium on the purchase price of the home meaning that those on the lower end of the home purchase market are getting screwed the most.

If you don't believe this - you need to raise Fr. Zryini from the dead and have him draw you one of his awesome graphs. I can assure you that you will be enlightened AND entertained.

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Maybe you can help deepen my understand then Stevil.

In 2010 (the last year that data was easily found. I'll dig for 2014 info later today)
Total Population of Boston: 617,594
Owner-Occupied Unit Population: 204,363 (yes, some of these will be kids but their parents get the exemption)
Renter Occupied Population: 367,017
Institutional population: 46,214
Adding Owner + Renter + Institutional populations = 617,594

So if those 204,363 owners occupy the 85,791 units of the total 252,699 housing units in the city, how is that not 33% of housing?

Let use your example of the $300,000 home. Currently at $11 per thousand, the taxes would be $3,300. Subtract the exemption of $1961 = $1339 current bill. But what if the tax rate was Stevil's $9 per thousand? 300 x 9 = $2,700, which is lower than $3,300 but still higher by $739 with the current exemption. If the topic of removing the housing exemption was on the docket by the Mayor, then I would agree that it would be time to consider this. But it is not. Plus, the tax rate seems to be consistent over the past 5 years (City of Boston FY15 Facts and Figures, Figure 4) and I wonder if this due to residents using the exemption?

Regarding the exemption, I'm pretty sure I understand "how it works" when it comes to my paying my taxes, my mortgage and my monthly bills. I can't just "understand that the tax rate would be lower" without any proof. I feel like that is like if I told you "I'm going to have six pack abs by summer." Stevil replys "How? Are you changing your diet? Exercise? What's your plan?" And my response would be "I don't have time to explain right now. Just believe me." Why should you believe me?

The example of the home purchase is fair, especially how banks can ask for greater down payments, etc, but I have yet to hear anyone in my neighborhood say that due to a $1,961 exemption they are going to bump their offer up by $25,000. That seems a but far fetched to me. Or did you mean to write they would up their offer by $2,500 NOT $25,000. That would make more sense in regards to your example.

What I have heard down here is mostly how people who have lived in the city for years and years, mainly older parents, using the equity in their homes/or the sale of, to help their kids buy places at prices way above assessed value. But people want to buy and they are willing to pay whatever it takes to compete against developers and home-flippers who are coming in $25,000 to $40,000 over asking price. It's bonkers.

I think I also need more context around what you mean by "screws the city" because that is very strong language. Are you implying that city is losing money due to this exemption?

Do you mean that the 367,017 renting population is forced to pay more because homeowners are getting a $163 a month savings?

Or are you implying that the landlords are forced to increase rent for tenants to make a profit because they aren't getting the $163 savings per month? But what about landlords in 2 or 3 family units that are owner occupied AND being used as rental income? Are they getting screwed or just making more money?

And why do you think that a $3,000 rent deductible washes out but a $1,961 homeowner does not?

I'm also not shedding any tax tears for anyone that owns a home valued at $1.2 million or more. That is a FWP if I have ever heard one.

My other question is still not answered in that how is this "a scam"? Outside of an economic theory, is there another city that you can reference for a comparison of tax rates? Another city that either had an exemption and got rid of it, or a city of similar size that does not have an exemption and what their rates are? Because if there is, I would love to read about it.

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Here goes

1) there are 75500 inits getting the exemption. That's my 30%. I count households you count people. 30%/33%. Tomato tomahto. I think wecare also up around 265k units now.

2) not on the docket likely never will be. Went through this w a city councilor a few years back. When he couldn't refute that this was likely hurting more than helping i said so when are we getting rid of this. He said never. People like it. Politicians -arrrggh.

3) my point is any savings w or without the mortgage just gets built into the price. If you pay less taxes you'll just end up paying more in purchase price and mortgage. THAT drives up prices and makes buyers less financially secure and is the exact opposite of the intended purpose of the law.

4) you need to understand how the taxes are calculated. Its a formula. Basically the city calculates the max they can levy by law. Then they divide that by the value in thousands of all the real estate. The total taxes goes up about4% a year. In good times real estate goes up by more so the rste goes down. If real estate values dip the rate goes up. Actually a bit more complicated but that's effectively how it works. It's all based on formulas. The city has almost zero discretion.

5) one of those complications is the exemption. Before calculating the rate they remove the total taxes temains the same but they remove the value of the exemption - about $178k per each of 75k qualifying homes. So the total LESS the exempt amount becomes the denominator - and with a smaller denominator you get a higher rate. The city loses nothing. It's not an exemption. It just makes some pay more and others less.

6)again nobody is calculating this with a pencil at a desk. But in my experience people add up what they can afford and then bid to get the most/ best house for them. If you get a $1500 tax break its my belief people spend that on more mortgage, especially in hot markets ir they won't get the house. Also especially for lower priced homes where people are often stretching more and have less cash, hurting those who can least afford it. We seem to agree 100% on this. If extr mortgage isn't enough, mom and dad lend a hand.

7) As noted the city gets their max pound of flesh. I mean screws the people of the city.

That's all i can get to now. Thumb cramp. More later.

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That's the how here's the why. So we see this drives up costs for landlords which eventually makes its way to tenants. Again, nobofy is poring over spreadsheets calcating this. It's one more cost thst drives up rents in this town. In the aggregate businesses have to make a profit yhat across the industry. Stack on 5-10% fees an you've just explained 5-10% of the cost of renting in boston.

Landlords of 2-3 dont get screwed. In aggregate they make their money. But they too have to pass on that cost so their tenants eat it. Although they probably do have to pay up a little for their own unit like a single family home.

as for property tax v. Rent its a buy rent issue. The deduction helps the landlord more than the tenant. If i can afford $2500 with no deduction that's what I'll pay with no deduction. If i can pay 2625 which nets to 2500 I'll pay that. Drives up cost perhapsbbut does nothing to my wallet. I just give itvto landlord instead of beacon hill. If i get the tax discount I have to pay that extra $25k for a loooooong time with interest.

I'm not going to get into a classist debate. The point is at 1.2 million and above at a point where you are already paying a lot of taxes they jack them up more.

So the roughly 70% of people renting plus the 5% of rich people plus the 15% of people owning homesbup to say $400k get screwed. Maybe just maybe the gross benefit to the other 10% is a few hundred dollars a year.

This is a uniquely Mass law. Most places dont have these rules. The problem is you can't get rid of it. Prople THINK they are getting a benefit but when you analze it carefully it becomes apparent to anyone with training in economics that this law accomplishes the exact opposite of what it is purported to do.

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Stevil,

Thank you for taking the time to explain your POV. While I disagree on a couple points, more political/people based than an economic issue, I do appreciate the depths you went in your reply. I think it was a great example of how Uhub works to create engaging discussion about the city.

Sorry for taking so long to reply. One kid came down with pneumonia and the other has something else (but we can't see the doctor yet because she hasn't been sick "long enough". Don't get me started on that...)

Big ups to Adam for moderating on what seemed like a busier than normal week on the Hub.

Have a good weekend.

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Hope everyone is feeling better.

My main concern is that at the VERY BEST - this has no impact. But it can be well argued that it actually hurts those that it is designed to help. And even if the it has no impact - well then why have it on the books.

That said a) if you are eligible you should take it and b) if they ever got rid of it - I'd advocate grandfathering in current owners - because if there's a "penalty", you've already paid it.

Finally - you ask good questions and make good points - establish an ID and jump in more on these debates.

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That really isn't enough, without new regulation this issue won't be resolved.

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Dear Anon: Thanks for cleverly writing two posts in a row that say almost the same thing. Once would have been sufficient.

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It's not a big deal. No one really cares.

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We could build enough housing in the city if the BRA was abolished and replaced with a real planning agency which would rezone the city realistically to meet the needs of the 21st century. The BRA serves no purpose other than politics and personal enrichment. It needs to go for the city to prosper as a whole and not just the connected or favored few.

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is a tool of the Mayor it is never going to be reformed. I suspect that Marty has realized that real planning means that you can't hand out favors to who ever turns up (harborside garage towers for example). I would love to see a real planning department, but have no expectation that will ever happen.

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It doesn't really matter how much you build so long as people who aren't from here and just want to speculate on properties can buy them without restrictions,.

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Did he mention the t at all or does he not recognize how dependent the residents of Boston are on the mbta?

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All's good in the world's greatest city, I guess.

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The T is outside the City's jurisdiction. To the extent that they're accountable to anyone, it's state-level, not city.

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But there are plenty of other issues where he was encouraging changes by the state. The city regularly files bills with the state to effect improvements for the city that need state action.

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The highlight of his speech was about the promotion of one of his Olympic bid people to a senior planning position at the BRA.

Remember in October 2013 when Walsh laid out a 14-point plan to replace the BRA with an actual planning department? He posted the plan on his campaign web site, won the election a month later, and then before he was inaugurated the plan quietly disappeared.

Fortunately for Walsh, all is not lost. A copy got stored in the Internet Archive. So, when he's up for reelection in 2017 he can dust it off and repost it and campaign as the reform candidate, again.

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It was Long Island (not Deer Island) that was precipitously closed down.

(And I'd like to see somebody with more data analyze the claim that all those shelter beds have been replaced. I think that only looks at a narrow class of short term emergency shelter, and it ignores all the other services on Long Island that haven't been replaced and the nonprofits that made capital investments on the island that are now wasted.)

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Too many islands, too little coffee (Deer Island has its own shameful history, but that goes back a few hundred years). Reference fixed.

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A new mayor would be a fantastic improvement.

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Now, now, Walsh still has time to rectify his follies. Glad to see an emphasis on education. Start firing the teachers who underperform!

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I think the shelter that was shut down was on Long Island, right?

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We've ended chronic veterans' homelessness? When did that happen? Walking through Downtown Crossing on any given day, I'm not sure the Mayor is correct on this point. I see plenty of homeless vet's every day. Did anyone else find this suspect?

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Was his not mentioning any action to end the holdup of construction of an apartment building for veterans in Brighton.

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I suspect by "ending chronic veteran's homelessness in Boston" he meant "we've managed to shunt the homeless veterans to Cambridge, Somerville, Watertown, Newton, etc. etc...anywhere but here."

Because clearly there are still, shamefully, a ~lot~ of homeless veterans around.

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NEW TERM RESOLUTIONS
Councilors Share Their Goals for the 2016-2017 Term
http://listserv.cityofboston.gov/read/archive?id=36321

Last night, Mayor Martin J. Walsh delivered his second State of the City address at Symphony Hall. Today, we asked the thirteen members of the Boston City Council to outline their own priorities for the new legislative session. Each brings something new and different to the table, and each has a different vision for their district and the entire city. They all want to change Boston for the better, but what are their individual goals for the coming term?

Salvatore LaMattina (District 1)
New middle school and senior center for East Boston
Waterfront access for unified harbor walking path
Ferry service to Downtown, Charlestown, and the North End
More workforce housing

Bill Linehan (District 2)
Spend more time in District 2 post-Council presidency
Continue alcohol tax initiative for recovery services
Create more workforce housing as Chair of the Committee on Planning and Development

Frank Baker (District 3)
Focus on development and economic opportunity
Work to implement new innovative traffic calming measures
Improve public safety throughout District 3

Andrea J. Campbell (District 4)
Provide a welcoming and accessible office at City Hall
Ensure delivery of services to District 4 constituents

Tim McCarthy (District 5)
Continue to provide quick and reliable constituent services
Partner with Hyde Park, Mattapan, and Roslindale Main Streets
Support the District 5 small business community

Matt O'Malley (District 6)
Ensure future generations can grow and thrive
Help make Boston an even greener and cleaner city
Identify new, innovative, and cost-cutting energy and environmental policies

Tito Jackson (District 7)
Make sure Boston Public Schools has adequate resources
Help our amazing students get what they need to succeed
Meet constituent needs promptly with courtesy and compassion

Josh Zakim (District 8)
Deliver strong and reliable constituent services
Work with the Walsh Administration to locate space for a new downtown K-8 school

Mark Ciommo (District 9)
Remain accessible and responsive to constituent concerns
As Chair of the Committee on Ways and Means, work with Mayor Walsh, President Wu, and other councilors to pass a budget that reflects our shared values

Annissa Essaibi-George (At-Large)
Improve public safety by leading the fight against addiction and homelessness
Strengthen neighborhoods and their arts communities
Help Boston Public Schools deliver excellent education

Michael F. Flaherty (At-Large)
Spend more time volunteering with local non-profit and charitable organizations
Collaborate with district councilors and community leaders on neighborhood-based initiatives

Ayanna Pressley (At-Large)
Continue to work toward greater neighborhood equity
Ensure that every Bostonian can lead healthy and thrilling lives regardless of their status or community

Michelle Wu (At-Large)
Revamp the City Council website so that all dockets and documents can be tracked online
Encourage each committee to hold town hall meetings in the neighborhoods so the Council can set an action agenda
Expand the Council art and internship programs

http://listserv.cityofboston.gov/read/archive?id=36321

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