State Cuts Aid to City; School Repairs Postponed

The Cambridge City Council last night received more bad news about the city's finances in the wake of Proposition 2 1/2.

City Manager James L. Sullivan said that funding for school renovations must be postponed indefinitely due to last week's loss of the city's bond rating and that he will ask the council next week to cut an additional $2.3 million from Cambridge's 1982 budget because of decreased state aid.

Governor Edward J. King last week released preliminary state aid figures which show that Cambridge will be charged $1.1 million more in 1982 than in 1981 and will receive $1.2 million less in state funding for a net loss of $2.3 million.

Sullivan called the figures "totally unexpected" and blamed the decreased aid on the skyrocketing costs of the Massachusetts Bay Transportation Authority, the Metropolitan District Commission, and Massachusetts county government.

"Nothing can be done" to change the state funding, which will not become final until the Massachusetts House approves King's 1982 budget, Sullivan said, adding that "we just hope we'll be able to get some new state aid."

The legislature will also decide on funding for capital improvement projects, such as the $10.2 million plan for renovating three city schools which the council approved last week, Sullivan said.

Cambridge and 43 other Bay State cities and towns last week lost their ability to raise money through bonding when Moody's Inc. of New York a major financial house revoked their bond ratings because of the financial uncertainty created by Proposition 2 1/2.

The city council last night approved a $4 million addition to the school construction project, but Sullivan labelled that decision a mere formality.

"The bond issue process for these schools will not be solved in the near future, and certainly not before July, when Moody's will look at them again," Sullivan said.

But Sullivan predicted that no change in the Massachusetts bond market will occur in July unless the Legislature first acts to ameliorate the effects of Proposition 2 1/2, the controversial tax-cutting measure which Bay State voters approved by a 2-1 margin last fall.