City Council Rescinds Decision On Research, Consulting Tax

The Cambridge City Council Monday rescinded a week-old vote and decided not to send the legislature a request that it be allowed to tax "professional, research or commercial services."

The council, which had supported the measure 7-1 a week ago, voted 5-3 against the proposal, after Clark Abt, president of Abt Associates, a Cambridge consulting firm, said he would probably move his firm out of the city if the tax was "pursued."

Abt said that at least ten other presidents of consulting firms in the city shared his sentiments. Councilors Walter Sullivan, Alfred E. Vellucci and Mayor Francis H. Duehay '55 switched their votes on the issue from a week ago. Councilors David Wylie, Saundra Graham and David Sullivan were the only councilors who continued to support the bill.

The proposed 1-per-cent tax on services-aimed, according to its sponsors, at city consulting and research services that are exempt from sales taxes-was one of six proposals sent to the legislature in an attempt to increase tax revenues in the wake of proposition 2 1/2.

Out of Control

The Cambridge Chamber of Commerce Monday attacked one of the other proposals-a 1-per-cent payroll tax-and suggested that Cambridge abolish rent control and allow unlimited condominium conversion in an attempt to increase its tax base.

The council was not asked last night to rescind its payroll tax decision, although that request may come next week.

Abt, who said the tax would cut the company's profits in half, said the excise would "force many of these enterprises to leave the city."

"Damage has already been done to the confidence of the research and professional businesses," Abt said, adding that "the damage can still be reversed if strong action is taken now."

"Cambridge is a world leader in this field; to have our field discriminated against by our own city council comes as a shock," Abt said.

But Wylie, Sullivan and Graham insisted that the firm's taxes would decline as a result of proposition 2 1/2, and that if new sources of revenue were not found, services in the city will be dramatically cut.

Stephen Marglin, professor of Economics, called the research tax a "very desirable kind of tax to consider" and added that because many contracts are negotiated and not bid for, the tax could be passed along.

Before the city council meeting Monday, city officials and the Cambridge state legislative delegation held a joint press conference to discuss the tax package to offset Proposition 2 1/2, all components of which will require state approval.

State Sen. Michael LoPresti said a proposal to levy property taxes on Harvard might pass with a strong lobbying effot, a sentiment shared by State Rep. Saundra Graham and newly elected State Rep. George Bachrach.

"I'm not saying don't worry. I am saying there's a chance," LoPresti said.

"Harvard has a strong lobby, but we have some strong people on our side," Bachrach added.