Low Tax Hike in New Budget

City Manager Robert W. Healy yesterday unveiled Cambridge's fiscal 1996 budget, asking the City Council to approve a total of $317,811,335 operating expenses, a 4.8 percent increase over last year's operating costs.

But Healy proposed only a modest property tax increase of .8 percent, the smallest tax levy hike since fiscal year 1983.

According to the city manager's budget message, the cost of the hike will be covered by taxes on new properties entering the city's tax rolls this year. Cantabrigians will effectively pay the same property taxes next year as they did in fiscal 1995, councillors said.

The city expects to collect a total of $145,623,133 in taxes for fiscal 1996, of which 41.1 percent is used on educational programming.

Although Healy's budget figures reinforce the stable financial image of Cambridge--which had a surplus of more than $11 million last year--the city manager was criticized by some residents yesterday for his lack of fiscal conservatism.

Some residents said last night the city should be spending less, lowering commercial property taxes and saving surplus tax dollars in a fund balance--essentially the city's savings account, used for unforeseen circumstances and non-budgetary expenditures.

The release yesterday of the more than 400 page-long budget launches a season of five public hearings,

By state law, the City Council must approve the budget within 45 days, or by May 24. The new budget is schedule to take effect July 1. The council has the authority to make reductions in the proposed budget, but cannot make increases without the city manager's consent.

The budget appears to be yet another fiscal success for a city which has so far managed to provide an extensive range of social services--notably in community health care--while protecting a tax base largely supported by businesses.

This year's budget proposes another substantial increase in the city'ssocial service spending: a public housing programintended to assist tenants displaced or threatenedby the elimination of rent control.

For the last three years, Cambridge has savedaround $15,000,000 annually by making changes inemployee health benefits and by stabilizing salaryexpenses, according to Healy. In the meantime thecity has erected a new Area Four Youth Center andtwo elementary schools. A new senior-citizenscenter is still under construction inMid-Cambridge.

Social Spending

In February, city officials also announced therevamping of the city's public health-care system.The expansion of the Cambridge Hospital plantcontinues.

The council also unveiled plans last night forCityHome, a new city housing plan aimed atreducing the shrinkage in affordable city housingbrought about by last November's decision to endrent control.

Since January, the council's Housing andCommunity Development Committee has been meetingto review the loss of 15,700 rent controlled unitsand the prospect of a decrease in federal fundingfor housing.

The council's program would help tenants becomefirst-time homebuyers by providing "counseling,education and training to existing tenants,"establishing second mortgage programs incooperation with Cambridge banks, establishingcity, federal and state funded mortgage pools andby providing assistance with rehabilitation andclosing costs for those displaced by the end ofrent control, according to a description releasedby the council.

Healy has recommended a city commitment of $20million in annual contribution to "maintain,expand and stimulate affordable housing." TheCouncil last night recommended full approval ofthe City Manager's commitment.

"It's more money, we believe, than any city ofits size is spending on affordable housing," CityCouncillor Francis H. Duehay '55 said last night.

Other major expenses in the new budget include:

The addition of six Police Department patrolofficers, costing $230,055;

Debt service and operating funds, totaling$1,264,160, for the new city-wide senior center,set to open let 1995;

A rent control budget of $818,960, down nearlyhalf from last year's budget after the abolitionof rent control by a state referendum;

The school budget, totaling $85,404,980.

At last night's meeting, critics charged thatthe magnitude of city expenses, combined with thepossibility of federal cuts to social services,that should make Cambridge save more and spendless, critics charged at last night's City Councilmeeting.

"Reduce the budget," John R. Moot, a member ofthe Cambridge Civic Association, told Healy lastnight. Moot produced figures showing thatCambridge spends more per capita than severalother Massachusetts communities with largerpopulations.

Cambridge spends $143.45 per person on generalgovernment expenses compared to the $47.22 spentby Worcester, even though the city has only 94,000residents to Worcester's 163,000.

"We're a rich, lucky city but we're spendingevery penny we get and borrowing more," Moot said.

Moot cited the recent departures of Stride Riteand Polaroid from the city. "You're taxing themtoo much, and corporate flight is a realpossibility," he said. "This city council haschosen to hit the [businesses] with everythingthey've got and to hit them hard."

But other councillors defended the budget,saying it is necessary to maintain the manyservices the city provides its residents.

Mayor Kenneth E. Reeves '72 said StrideRitemoved because it was centralizing its productionsite in Kentucky.

Responding to concerns over the city'scommercial tax base--which accounts for two-thirdsof Cambridge's total property tax revenue--thecouncil passed, 8-0, a resolution ordering Healyto arrange a presentation on the city's long-termefforts to preserve its commercial tax base.

Councillor Anthony D. Galluccio, who sponsoredthe resolution, said companies need to be certainof both the obligations and benefits of beinglocated in Cambridge. "They want to have aconsistent, clear environment they can count on,"Galluccio said.

Duehay disagreed, saying the city's financialposition remains enviable. "The tax base of thiscity has exploded, and we have offered humanservices other cities are not able to offer," hesaid.Crimson File PhotoCity Manager ROBERT W. HEALY, who isresponsible for the city's finance andadministration, in his City Hall office.

For the last three years, Cambridge has savedaround $15,000,000 annually by making changes inemployee health benefits and by stabilizing salaryexpenses, according to Healy. In the meantime thecity has erected a new Area Four Youth Center andtwo elementary schools. A new senior-citizenscenter is still under construction inMid-Cambridge.

Social Spending

In February, city officials also announced therevamping of the city's public health-care system.The expansion of the Cambridge Hospital plantcontinues.

The council also unveiled plans last night forCityHome, a new city housing plan aimed atreducing the shrinkage in affordable city housingbrought about by last November's decision to endrent control.

Since January, the council's Housing andCommunity Development Committee has been meetingto review the loss of 15,700 rent controlled unitsand the prospect of a decrease in federal fundingfor housing.

The council's program would help tenants becomefirst-time homebuyers by providing "counseling,education and training to existing tenants,"establishing second mortgage programs incooperation with Cambridge banks, establishingcity, federal and state funded mortgage pools andby providing assistance with rehabilitation andclosing costs for those displaced by the end ofrent control, according to a description releasedby the council.

Healy has recommended a city commitment of $20million in annual contribution to "maintain,expand and stimulate affordable housing." TheCouncil last night recommended full approval ofthe City Manager's commitment.

"It's more money, we believe, than any city ofits size is spending on affordable housing," CityCouncillor Francis H. Duehay '55 said last night.

Other major expenses in the new budget include:

The addition of six Police Department patrolofficers, costing $230,055;

Debt service and operating funds, totaling$1,264,160, for the new city-wide senior center,set to open let 1995;

A rent control budget of $818,960, down nearlyhalf from last year's budget after the abolitionof rent control by a state referendum;

The school budget, totaling $85,404,980.

At last night's meeting, critics charged thatthe magnitude of city expenses, combined with thepossibility of federal cuts to social services,that should make Cambridge save more and spendless, critics charged at last night's City Councilmeeting.

"Reduce the budget," John R. Moot, a member ofthe Cambridge Civic Association, told Healy lastnight. Moot produced figures showing thatCambridge spends more per capita than severalother Massachusetts communities with largerpopulations.

Cambridge spends $143.45 per person on generalgovernment expenses compared to the $47.22 spentby Worcester, even though the city has only 94,000residents to Worcester's 163,000.

"We're a rich, lucky city but we're spendingevery penny we get and borrowing more," Moot said.

Moot cited the recent departures of Stride Riteand Polaroid from the city. "You're taxing themtoo much, and corporate flight is a realpossibility," he said. "This city council haschosen to hit the [businesses] with everythingthey've got and to hit them hard."

But other councillors defended the budget,saying it is necessary to maintain the manyservices the city provides its residents.

Mayor Kenneth E. Reeves '72 said StrideRitemoved because it was centralizing its productionsite in Kentucky.

Responding to concerns over the city'scommercial tax base--which accounts for two-thirdsof Cambridge's total property tax revenue--thecouncil passed, 8-0, a resolution ordering Healyto arrange a presentation on the city's long-termefforts to preserve its commercial tax base.

Councillor Anthony D. Galluccio, who sponsoredthe resolution, said companies need to be certainof both the obligations and benefits of beinglocated in Cambridge. "They want to have aconsistent, clear environment they can count on,"Galluccio said.

Duehay disagreed, saying the city's financialposition remains enviable. "The tax base of thiscity has exploded, and we have offered humanservices other cities are not able to offer," hesaid.Crimson File PhotoCity Manager ROBERT W. HEALY, who isresponsible for the city's finance andadministration, in his City Hall office.