State Aid Weighed for College Cities

Two state commissions will this fall begin investigating the possibility of subsidies to municipalities such as Cambridge which have a large population of tax-exempt educational institutions, but a top city official is pessimistic about the chances that the proposal will ever be adopted.

Gov. Michael S. Dukakis's local aid study group and a joint legislative committee on taxation will examine the proposal, which could result in a larger allocation of state aid for Cambridge to counter revenues lost because of large tax-free land holdings of educational institutions like Harvard and MIT.

But Cambridge City Manager Robert W Healy said yesterday that he did not expect the proposal to be approved because its benefits are not spread evenly enough among all cities and towns in the state.

Harvard and MIT own the bulk of the 52 percent of Cambridge land that is tax-exempt, Healy said. The two institutions annually make approximately $1 million in-lieu-of-tax payments to the city, he added. Healy was unable to specify the exact value of the land the universities own.

The revenue Cambridge could receive if the plan is implemented would depend on the percentage of lost tax money the state decided to replace, a spokesman for the joint legislative committee said.

She added that it was too early to tell whether such a proposal would be incorporated into next year's budget. "The concept has been received favorably, but the financial implications is where there is a problem," she said.

A bill calling for such compensation has been dormant in the House since it was introduced four years ago by Rep. Joe De Nucci (D-Newton) on the urging of Northeastern President Kenneth Ryder and Newton Mayor Ted Mann.

The committees are looking into the proposal, the spokesman added, as part of a broad overview of possibilities in state aid to localities.

Proponents of the idea argue that cities with educational, medical, and recreational facilities provide services that benefit the entire state without their host cities receiving adequate compensation.

Connecticut adopted a similar law in 1978 which reimburses municipalities for 25 percent of any revenue lost because of tax-exempt higher educational medical property.

"Services that the state is mandated to provide are assumed by institutions like Harvard." Vinnie Limbo, a Northeastern University governmental affairs official, said yesterday, adding, "the cities are the ones who bear that burden through lost taxes."

Limbo pointed to the high-tech industry along Route 128, which has provided an economic stimulus to the Commonwealth, as an example of how educational institutions can fuel resources beneficial to the whole state.

Jacqueline O'Neill, Harvard's vice president of community affairs, was not available for comment yesterday