New City Budget Includes Tax Levy

Even the most optimistic budgetary scenario presented to the Cambridge City Council finance committee last night calls for a property tax levy at about the legal maximum and no new spending initiatives.

The biggest savings in the 1993 fiscal year budget proposed by James P. Maloney, the city's finance director, would come from switching employee health insurance from Master Health Plus to HMO Blue.

"If we were able to get all the groups in, we'd be talking at the high point around $6 million in savings," Maloney said.

However, these savings will be offset by other financial forces, according to city forecasts.

Cambridge has now reached the legal property tax levy limit. This means that the tax rate, which has increased by an average of nine percent annually since fiscal year 1989, will only be able to grow at about three or four percent annually.

City Manager Robert W. Healy cites this and other financial concerns, including a declining tax base, no increase in state aid, and low non-property tax revenues, in his introduction to the budget guidelines given to individ- ual departments. Healy directed departments to avoid submitting budgets that exceed the levels adopted for the 1993 fiscal year.

This kind of level funding traditionally causes concern among people who feel that it does not adequately provide for departments, such as those which provide human services, which need to expand during difficult economic times.

Maloney said that all departments have submitted preliminary budgets which follow the guidelines, although some have attached supplemental requests. These requests will be considered, he said.

"When we set guidelines for all departments to be treated equally in the preparation stage, that doesn't mean that all budgets will be treated equally in the final stage," Maloney said.

The only scenario devised so far which would not create a revenue gap for the city assumes that departments will be funded at the 1993 level and that all employees and retirees--except those of the fire department, whose contracts extend through fiscal year 1994--will be switched to HMO Blue by July of 1993.

The manager's office projects that under this scenario, the city will be able to provide four percent cost-of-living salary increases in fiscal year 1994 and a 10 percent increase in pensions-and still remain just below the legal tax levy, Maloney said.

But Councillor Edward N. Cyr, the chair of the finance committee, said he felt the council would be looking for a lower increase in the tax levy.

When Maloney said a lower tax levy is unlikely unless workers are laid off, Cyr said he had faith in the manager's ability to accomplish whatever he sets his mind to do.

"The most constructive role the Council can play is by setting a tone," Cyr said. "The manager has proven quite capable of responding to that.

This kind of level funding traditionally causes concern among people who feel that it does not adequately provide for departments, such as those which provide human services, which need to expand during difficult economic times.

Maloney said that all departments have submitted preliminary budgets which follow the guidelines, although some have attached supplemental requests. These requests will be considered, he said.

"When we set guidelines for all departments to be treated equally in the preparation stage, that doesn't mean that all budgets will be treated equally in the final stage," Maloney said.

The only scenario devised so far which would not create a revenue gap for the city assumes that departments will be funded at the 1993 level and that all employees and retirees--except those of the fire department, whose contracts extend through fiscal year 1994--will be switched to HMO Blue by July of 1993.

The manager's office projects that under this scenario, the city will be able to provide four percent cost-of-living salary increases in fiscal year 1994 and a 10 percent increase in pensions-and still remain just below the legal tax levy, Maloney said.

But Councillor Edward N. Cyr, the chair of the finance committee, said he felt the council would be looking for a lower increase in the tax levy.

When Maloney said a lower tax levy is unlikely unless workers are laid off, Cyr said he had faith in the manager's ability to accomplish whatever he sets his mind to do.

"The most constructive role the Council can play is by setting a tone," Cyr said. "The manager has proven quite capable of responding to that.