Council Considers Prop 2 1/2 Measures

The Cambridge City Council is expected to take final action next Monday on a series of requests for state relief from the effects of the tax-cutting Proposition 2 1/2.

The council debated a series of proposals last night, any of which would require state legislative approval. They include:

* A spring referendum to override the controversial tax cut, passed with widespread support last November;

* A 1-per-cent payroll or sales tax; and

* An end to the exemption from the property tax granted to city universities, and the taxing of those institutions at half the normal rate--a move that could net the city as much as $17 million.

City councilors agreed last night that they would send as many proposals as possible to Beacon Hill in hopes that some would get through the state legislature. If Proposition 2 1/2 goes into effect as scheduled with the next fiscal year, the city may have to lay off as many as 1000 city employees.

"Our legislative delegation has warned us very strongly that we should come to the legislature unanimously seeking help if that is at all possible," Councilor David Wylie said.

The proposals fall into two general areas--overrides of the measure, either by the council or by voters in a special referendum, and the creation of additional sources of revenue.

Wylie warned his fellow councilors in a memorandum not to let it appear to voters that "we are trying to raise even more revenue than in the past so we can spend more." He suggested a council pledge not to let next year's property tax collection exceed the present level even if the override vote passes.

"The city simply cannot live, creatively or otherwise, with Proposition 2 1/2," Councilor David Sullivan said. "I don't think we can afford to choose which of these alternatives we will send to the legislature. We may have our preferences, but we should send them all," he said.

University officials were unavailable for comment last night on the proposed payroll tax and the end to university exemptions from the property tax, both of which would hit Harvard heavily.

Louis Armistead, assistant to the vice-president for government and community relations, said several weeks ago that "nobody likes to pay taxes," but refused further comment.

Cambridge residents voted nearly 2-1 against Proposition 2 1/2 in November, but the measure, supported by Bay State businessmen, passed by almost the same margin statewide.

Some state legislators have said they will be reluctant to allow any local override votes or the creation of any new taxes because of the widespread support for the proposition.

"People voted for 2 1/2 because they wanted their taxes cut, not because they wanted to see payroll taxes or sales taxes or any other tax replace the property levy," one state legislator, who asked not to be identified, said yesterday.