Cambridge in the Red

AS LONG AS your expectations are reasonable, as long as you don't insist on wispy concepts like fairness, politics makes perfect sense.

In Washington last week, Congress took the first giant leaps toward ending revenue sharing with the states. After all, Congressmen have to be reelected or they'd be out of a job. Think how much easier it is to win votes if federal taxes haven't increased. And since the defense budget is going to jump 22 per cent next year, the money is going to have to come from somewhere.

On Beacon Hill, eight minutes from here by subway, the same kind of natural laws prevail. As a result, state aid to cities and towns won't increase much this year; it may even go down. And who can blame the legislators? After all, they stand for reelection every two years as well.

This happy chain has one last link, the local community. Closest to the people, providing the most direct services, and the last stop on the governmental ladder, with no one else to serve as a political buffer. And so, the Cambridge School Committee is meeting this week, trying to decide what is and isn't important. Remedial reading? Probably not. Elementary school science courses? Libraries? Guidance programs? It's like the old camp song, where the one guy rolls over, and the guy at the other end of the bed falls out. The MX missile rolls over; you can wish foreign language instruction a fond au revoir. The balanced budget rolls over; out the other side plops special education programs for disabled youngsters.

Other parts of the city budget may suffer less. In an effort to stay within Gov. Edward J. King's 4 per cent limit on tax increases, City Manager James L. Sullivan ordered every department head to request no more than 2 per cent over last year's budget. "No budget request came in much above that, and some came in a little below," Sullivan said. But figure out the math. If inflation stays above 15 per cent, and budgets only increase 2 per cent, then total spending in real dollars will decrease dramatically. For a year, maybe two, inflation can be absorbed without paring services to the bone. "Everyone knows there is some fat in government," Sullivan says, but then he quotes State Sen. Barney Frank--"The problem is the fat is marbleized." But too many years of inflation and a continuing tax cap only spell disaster.

But the budget cuts are only half the problem. To maintain services at anything resembling their present level and to pay a living wage to city workers who must negotiate new contracts this summer, the city will have to increase taxes "like they have never been increased before," Mayor Francis H. Duehay '55 said last week. In the School Department alone, the no-science, no-reading budget ("everything I've done in the last five years, I've undone in the last five days," superintendent William Lannon said when he presented the document) will still demand an additional tax of $12 per $1000 of assessed property value. Adding school costs to the rest of the budget, property owners can expect to pay $30 to $50 more per thousand next year, an increase that will cost the average property owner between $500 and $900. "There's no increase in state aid, federal aid is cut back there's only one place to get the money," Sullivan says.

FROM THE POCKETS of property taxpayers will come the dollars needed to keep the cuts in services fairly shallow this year. But a new constraint on services threatens. Tax bills are mailed out in the fall; and two weeks later another autumn event, statewide elections, will offer taxpayers the chance for a California-style tax revolt. "People can't vote to decrease their grocery bills or the amount of money they pay for heat," Duehay said recently. "I'm afraid that coming on the heels of this tax increase, voters may be in a very receptive mood for tax-cutting." Should Bay State voters catch tax cut fever, the antidote would most likely be Proposition 2 1/2, a bill backed by the Associated Industries of Massachusetts and Citizens for Limited Taxation, which would roll back property tax levels to 2 1/2 per cent of assessed valuations. That wouldn't hurt some towns--outside Rte. 128, past Revere and Quincy, to Boston's silk-stocking suburbs, or down on the Cape--these tracts already enjoy a trim 2 1/2 per cent rate. For Cambridge, though, with property taxes currently at about 5 per cent of its value, things would be a bit tougher. Under the law, which would probably pass if voters went to the polls today, the city would have to roll back taxes, cutting revenues 15 per cent each year, until tax rates reach the 2 1/2 per cent level. In the first year, assuming inflation stays at 18 per cent, city spending in real dollars would have to decrease 33 per cent. The next year, optimistically, spending would have to slide 25 per cent more, and the next year the same. By the time Cambridge reaches the 2 1/2 per cent tax rate, the current tax levy of $65 million would be cut to $23 million, Sullivan reports. Over the same period, inflation could drive costs up 50 per cent or more. The result: "We wouldn't even have the money to pay our fixed costs--the interest on our debt, our MBTA and MDC assessments, the pensions." If all went as the backers of the referendum envision it, there would not be the money in Cambridge "to employ a single fireman or cop," Sullivan says.

Those who support the legislation, and a subsequent amendment to the state constitution that would slash tax revenue even more severely, say the picture is not so gloomy. "Every day some city manager or another is spouting off that this would be a disaster...They say the libraries will have to be closed or some such," Jim Sledd, public relations director for Associated Industries, says. "It's bullshit," he adds. In the first place, Sledd says, the tax cuts would be good for business, and that would mean expansion and hence more tax revenue. Greg Hyatt, executive director of Citizens for Limited Taxation, suggested another tonic for troubled cities--states might increase local aid to compensate for decreasing taxes.

The first solution means little to Cambridge--the city is already densely packed, six square miles of solid civilization. There is little room for expansion of the industrial base that might come if taxes were lowered, especially since half the city's land is owned by tax-exempt, non-profit institutions. Besides any business that would be lured by low taxes is already here--Cambridge routinely offers tax breaks to attract new companies.

As for increased state aid, this is the Eddie King era; a governor whose middle name is patronage is unlikely to go out of his way to find monies for local communities. Raising more money to pass on to cities is out--it would require politically unpopular state taxation.

EVEN THE BACKERS of the referendum acknowledge that it will mean significant budget cuts for cities like Cambridge. "The problem in Massachusetts is that they spend too much money." Hyatt said. "Is it right to force people who own property to pay for all the things the government wants?" he asks. "A lot of cities will have to get with it, and adopt better management techniques," he concludes. Sledd's message is much the same. "Our average income was dipping below the national average, which is kind of a horrendous idea for a modern industrial state like this...not some farm state like Mississippi or something...It's the producers against the public sector, which has grown too big."

But government has not grown too big in cities like Cambridge. It makes little sense to hold every city in the Commonwealth to the same spending standard. As Sullivan points out, if Cambridge bordered a wealthy suburb, and each had $100 million worth of property, each would be able to spend the same amount of money. Cambridge, however, has to provide subsidized housing, bus kids to integrate its schools, run low-cost hospitals, and fight high crime rates, while the suburb faces no crises much larger than where to build the Olympic-size swimming pool.

The assertion that somehow massive cuts can be made in city expenditures without affecting services is so twisted that it casts shadows on the credibility of those who posit it. Cambridge is not running a posh, private academy for its school children. It merely desires to provide them with libraries, remedial reading and other services that hardly qualify as frills.

Proposition 2 1/2, largely the product of greedy Bay State businessmen able to manipulate public opinion, looms threateningly, but the future is as gloomy as a March weather forecast even without the new law. As inflation drains the city's buying power, cutbacks in federal and state aid empty Cambridge's coffers. There are two ways out--but neither make sense in the strange algebra of American politics. An overhaul of the state's tax system would help cities by lessening dependence on the regressive local property tax and by increasing state income taxes. But before state legislators boost taxes, something will have to boost their courage. "People have been talking reform for 25 years, but every other year there's an election. State legislators will not vote to increase state taxes," Sullivan says.

The other solution is even simpler and even more improbable. If people could understand that most tax money, especially on the local level where there are no ICBM's to build, funds sane and necessary projects, the clamor to cut taxes might stop. That seems unlikely, however, in a society willing to cut out remedial reading programs in order to increase disposable income. After all, what's reading when you can buy a Betamax?