Friday, April 26, 2024

Conscious that a morning budget meeting on Wednesday may draw few participants, talk about the city’s $459.7 million operating budget began Monday at the City Council’s regular meeting. A key point: City Manager Robert W. Healy said a predicted 6.3 percent increase in property taxes brought about by economic difficulties could shrink in September, after the city’s budgeting staff has a chance to look at other revenue streams — such things as money from hotel and meals taxes.

“I want to have a less than 6 percent increase,” Healy said.

The need for an increase comes in large part from significant reductions in money coming from the state. There’s $8.5 million less coming to Cambridge from state government from the previous year, Healy said, and less going to city schools as well. (When state government reported Cambridge schools would get $350,000 less than expected in so-called Chapter 70 funding, the city stepped in to provide it.)

By rough calculations Healy gave only reluctantly, the property tax increases suggested by the budget picture now would raise an additional $17 million in the next fiscal year, with about two-thirds — or $10.5 million — coming from commercial properties and the remaining third from homes.

Variables

But uncertainty about that figure only starts with the fact this is a recertification year for Massachusetts, meaning the market value of all properties will be reassessed, affecting how much people pay in property taxes. Single-family homes and two-family homes are expected to hold their value, and three-family homes and condominiums — difficult to predict because they range so wildly in price — will “probably be down slightly,” Healy said, again expressing regret for the perhaps overly broad strokes he was painting.

Over the past five years, on average 80 percent of Cambridge residents got tax increases of less than $100 in a year, but a decrease in money coming from the state government will make that unlikely for the coming year. The city will keep on trying to spend less, though, and “look for sources of revenue outside property taxes. We need to look at all possible avenues,” Healy said.

Councillor Leland Cheung wondered how the tax rate could exceed 2.5 percent, the limit mandated by law in a 1980 vote, prompting an explanation from Healy of “excess levy capacity.”

A description of the formula by the Massachusetts Department of Revenue is here. An application of that formula by Healy means Cambridge could actually raise $92 million in the coming year, rather than $17 million — and, although the city obviously never would, Healy expressed relief Cambridge wasn’t one of those cities that restrict themselves to 2.5 percent increases. The result is grim, he said.

Councilor Tim Toomey wondered how quickly taxes from new construction and renovations would reach city coffers, just considering the huge amount of work being done on Brattle Street, the tony neighborhood off Harvard Square.

“Brattle Street is a parking lot for construction vehicles,” Toomey said. “People are building million-dollar homes, and that’s just on Brattle Street alone.”

There were rumors of $40 million in renovations being done on a single home bought for several million dollars, he said.

Unfortunately, revenue from such work lags by more than a year, city officials said.

Regardless, Healy said, “It will be September until we can deal in real numbers about the tax rate.”

Expenses

In the meantime, certain expense increases are all but certain, including 3 percent more in pay for members of city unions, $81,000 in added veterans benefits and $3.8 million in city employees’ health benefits despite changes made to plans to hold down costs. Four full-time-equivalent positions were eliminated amid the redefining of department roles or merger of city offices, but three others were added.

There are also oddities Healy cited Monday, such as the chronological one resulting in 53 weeks of wages paid in the coming year to firefighters and police officers. That’s another $1 million, he said.

The city continues to do well in comparison with many, officials said, with some marveling coming in response to a discussion of the Cambridge Main Library. It grew to 102,000 square feet from 37,000, but energy efficiency is adding only $231,000 to the budget, Healy said.

The budget meeting Wednesday at 9:30 a.m. is planned as a chance to look at expenses in several city offices, listed as

License Commission, Mayor’s Office, Executive, City Council, City Clerk, Law, Finance Admin., Budget, Personnel, Assessing, Purchasing, Auditing, Treasury/Revenue, ITD, Employee Benefits, General Services, Election Commission, Public Celebrations, Reserve, Animal Commission, Fire Department, Police Department, Traffic, Parking & Transportation, Police Review & Advisory Board, Inspectional Services, Weights & Measures, Electrical, Emergency Communications.

A budget meeting at 9:30 a.m. May 13 will look at

Cambridge Health Alliance, Public Works, Water, Community Development, Historical Commission, Conservation Commission, Peace Commission, Cable TV, Debt Service, Library, Human Services, Women’s Commission, Human Rights Commission, Veterans,  MWRA, Cherry Sheet, Summaries Section, Revenue Section, Public Investment

There’s a 6 p.m. May 19 meeting to look at the school district budget, and a May 20 morning meeting may be called if necessary. A budget adoption vote is scheduled for May 24.

In inviting councillors to the meeting Wednesday, councillor Marjorie Decker — chairwoman of the council’s Finance Committee —  urged everyone to stick to technical questions, and solely budgetary questions, about the topics listed for the day. “This should not be an opportunity to talk about additional programming not related to the budget. I promise also to abide by that principle,” she said.

She and other councillors hailed Healy’s leadership in keeping Cambridge in good fiscal shape, with Decker calling it a “combination of a great tax base and a well-managed city. It’s an incredible testimony [to Healy] to continue to be among the cities with the lowest tax rate in Massachusetts.”

“I don’t think there’s anything frivolous in the budget,” Decker said.

“It’s a good budget,” Healy said. “I think we’ve done as much as we can.”