State Aid to Cities Would Preserve Status Quo; Cambridge Officials Hope for $11 Million Package

Gov. Michael S. Dukakis's pledge to increase local aid by more than $150 million over last year has drawn praise from municipal officials who say that for the first time in three years they will be able to maintain a constant level of services, rather than cutting back drastically.

From that $2.2 billion package, Cambridge authorities are "conservatively hoping" for about $11 million, up from last year's $10 million, Richard C. Rossi, deputy city manager, said last week.

All of Cambridge's additional funds, however, will probably be spent just meeting inflation-induced increases in the city's fixed costs, such as municipal pensions, Rossi said. He added that while the boost gives Cambridge the best local aid package since 1980, some reductions will still have to be made.

"Even if we got that much aid, we would still have to be in some sort of 'cut' mode," Rossi said. "This won't be the kind of year where someone will just say that here's a million dollars, what do we want to increase with it," he added.

The Massachusetts Municipal Association, which represents the collective interests of all of the cities and towns, had a similar assessment of the aid's significance. The funding is enough to allow most towns to maintain the status quo by providing, the same level of services as last year, Allan Tosti, the association's fiscal analyst, said earlier this week.

All of the local aid's distribution among the state's 351 towns will be based on formulas which the governor hopes to propose to the legislature by the beginning of April, William H. O'Connor, assistant secretary in the office of administration and finance, said last week. The legislature will probably not pass the final formulas before late April.

O'Connor added that any actual estimates of aid before the new formulas are finished would be premature. "Cambridge is a big city, though, and has a lot of problems with Proposition 2 1/2, so it will certainly receive consideration," he said.

Massachusetts voters approved the property tax-cutting measure Proposition 2 1/2 in the fall of 1980. Since then, municipal budgets have been seriously strained not only because those revenues have been down, but also because former Gov. Edward J. King provided little local aid to counter the losses.

In his preliminary budget proposals for next year, King had not allocated any increase in local aid. In the last two years, though, Cambridge's revenue from property taxes has dropped from $80 million to $68 million, Rossi said.

In addition to the distribution, the other issue with the local aid is the possibility that portions may be earmarked for specific local expenditures, such as education.

O'Connor said that "earmarking is taking a back seat right now to how to distribute the aid fairly among all of the towns." However, he admitted that various groups are making efforts to have some set amounts earmarked for them.