City Finances: An Empty Till

In case you thought running a city was easy--

With inflation rocketing along at close to 18 per cent, the state legislature this spring reaffirmed its commitment to a "cap" on spending that allows municipal property tax increases no greater than 4 per cent.

That leaves a gap of 14 per cent--a gap that seemingly can be filled but one way, by decreasing services. And that option is easier said than done in a city coping with public housing, poverty and crime.

Cambridge has been wrestling with its budgetary dilemmas all spring; hardest hit was the School Department, which, despite a budget almost $3 million larger than last year, will still have to fire dozens of its staffers.

The City Council overrode the 4-per-cent cap by a two-thirds vote when the only option seemed cutbacks too harsh to accept. That decision should allow the city to give its workers raises, but it will also mean a tax rate $30 to $50 higher than last year's, officials warn.

Such an increase could cause still greater problems; municipal tax bills are mailed in the fall, weeks before state voters will register their opinion on Proposition 2 1/2, a tax-cutting measure as tough as California's controversial Proposition 13.

The city's leaders worry that big tax increases will persuade voters to favor 2 1/2. If they do, City Manager James L. Sullivan warns, Cambridge's current financial posture would be a comparative catbird seat.

"We could afford to pay the interest and our share of state charges, and that could be about it," Sullivan warns. No police, most likely, and no firemen. Very little public education, and almost no city government.