Amid National Anxiety, Cambridge City Council Reports Record Budget Surplus

Amidst a backdrop of national unease regarding the fiscal drama playing out in Washington, D.C., Cambridge City Council announced a free cash balance of slightly over $142 million in this year’s budget, a triple-A bond rating, and the minimizing of residential tax rates at Monday’s meeting.

The atmosphere in City Hall was a happy and congratulatory one with City Council members praising City Manager Richard C. Rossi for his team’s stewardship of the city budget. Councillor Marjorie C. Decker, chair of the finance committee, noted that Cambridge citizens will directly benefit from this advantageous financial position.

“This is the ninth year in the row that 75 percent of residents can expect a tax increase of less than $100,” Decker said.

Rossi said that this year’s unusual budget surplus was due in large part to the relatively small quantity of health insurance claims filed, “the lowest [the City Manager’s office] could remember.”

But the tone of discussion at the meeting shifted to one of caution when Councillor Leland Cheung emphasized the misleading nature of the term “free cash.”

“It is not free. It came from the taxpayer,” Cheung said, adding that the money is effectively the City’s “insurance policy against disaster.” Cheung said that he instead preferred the term “unencumbered fund”—a phrase which caught on at the meeting.

City Councillor Kenneth E. Reeves ’72 also stressed the necessary role of the funds in financing upcoming projects such as public school building renovations, given the highly unlikely status of state and federal funding.

Terrence F. Smith, director of government affairs at the Cambridge Chamber of Commerce, urged the City Council to adopt the city manager’s tax rate recommendations in the public hearing.

“On the behalf of my members, I thank the City Council and the administration for providing an excellent service while keeping taxes reasonable for residents and businesses,” Smith said.

Not all citizens were unabashedly positive about the city manager’s tax rate recommendation. Despite being satisfied with “the rosy financial situation,” Cambridge citizen Gerald Bergman said, “I’m going to say maybe the be-all-end-all for our moral and civic responsibilities is not the lowest possible tax rate, but how we meet the human needs of our residents.”

Bergman continued his critique by highlighting that MIT and Cambridge’s top ten real estate developers would be big beneficiaries of the $11 million in free cash if the City Council approved to lower the tax rate even further—not early childhood education and affordable housing.

The City Council also approved policy orders concerning the quality and long-term care of inclusionary zoning units and continued debate on the issue of elementary school classrooms.

—Staff writer Anja C. Nilsson can be reached at anja.nilsson@thecrimson.com. Follow her on Twitter @anja_nilsson.