Council Sets Varied Rate For Revalued Property

Cambridge may only be one week away from the seven-year long process of reassessing its real estate after the city council last night approved tax rates for commercial and residential property.

Acting on a recommendation from City Manager Robert W. Healy, the nine-member body set the rate for business higher than that for personal property, thereby putting a larger portion of the tax burden on the commercial community.

But the figure was less than it could have been under state law. Businessmen might have paid over $35 for each $1000 of assessed value, if the council had approved setting the residential level at its minimum.

An amendment to Healy's plan proposed by Councilor David E. Sullivan would have reduced the residential rate even further than the $17 approved. But the council's Conservative Independent faction closed ranks and the measure failed to gain a five-member majority.

The system of disproportionate taxation--known as classification--counters the discrepancy between the burgeoning value of commercial property in Cambridge and the relatively small percentage of real estate it represents.

The figures approved last night will now go before the State Department of Revenue for final certification.

Long Process

The state Supreme Judicial Court ordered the revaluation in 1976. But the process gained importance as a result of the 1980 tax-cutting measure Proposition 2 1/2. Under Prop 2 1/2, cities and towns in Massachusetts are required to reduce their property tax rates by 15 percent a year, until they reach a level of 2 1/2 percent of the total assessed value of their real estate.

"Such tax-cutting might have put Cambridge in difficult financial straits. Property in the city had not been revalued since the 1920s, and although the tax rate was high, most houses and businesses in the city were paying taxes on only a small percent of their actual market value.

The revaluation to 100 percent of market value leaves Cambridge with almost the same amount of tax revenue, despite the lower tax rate.

But the process has taken time. Tax bills, which are usually due in November, have not even been sent out this year, Healy said.

Bills Wednesday?

He added, however, that if the figures approved last night are accepted by the revenue department, property owners could find the news in their mailboxes by next Wednesday.

Local businessmen clearly were not happy with last night's decision. Charles P. Laverty of the Cambridge Chamber of Commerce, said that the $33.12 tax rate for commercial property approved will be the highest in Massachusetts when Newton finishes its revaluation.

"Since Cambridge is in between Boston and the suburbs, it has to be competitive for business," Laverty said, adding that a high rate would be "injurious to local merchants."

In addition to setting tax rates, the council voted down a measure that would have allowed homeowners living in their own houses to claim a 10 percent tax exemption, although the tax rate would increase.