City Budget Stays Stable

Thanks in part to a “moderate” property tax increase, the City of Cambridge has avoided major cutbacks, according to numbers released in the most recent city budget, as well as City Manager Robert W. Healy.

The city’s operating budget is almost $460 million for the 2011 fiscal year, a 3.1 percent increase from the 2010 fiscal year. Both reduction in state aid and increase in city expenses—such as employee salaries and pension packages—have contributed to the overall budgetary increase.

“The budget is very strong and stable,” Healy said. “We have been able to retain personnel in public works and there haven’t been any significant service reductions, largely due to controlled expenditures.”

This year’s budget saw a 3 percent increase in salaries for employees, a 7.4 percent increase in employee health insurance, and a 3 percent increase in employee pension costs. Other significant cost increases include debt service costs, which have risen 4.6 percent.

To cover the rising costs in the face of continued reduction in state aid, the city has predominantly had to increase property tax, according to Healy. The current budget calls for a moderate 6.3 percent increase in the property tax; last fiscal year, the city raised property taxes 5.9 percent.

Cambridge currently receives approximately 62 percent of its revenue from property taxes, according its 2011 budget. This places a very heavy burden on municipal funding, said City Councillor Leland Cheung. The amount appropriated from the property tax-supported debt has increased from $1 million to $7.2 million in the 2011 fiscal year budget to fund surface improvement projects in Harvard and Kendall Squares, in addition to the first phase of the Harvard Square Tunnel Improvement Project.

The city has had to reduce 28 full-time positions over the past seven years, although Healy said these cuts have made way for operational and programmatic staffing for major facilities that have opened during that time.

Healy and Cheung maintain optimistic attitudes towards the cuts and increases in this year’s budget.

“We are not facing many of the problems you’ll find across America,” Cheung said. “The most surprising aspect of this budget is how fortunate we are here in Cambridge to be doing as well as we are.”

—Staff writer Nadia L. Farjood can be reached at nadiafarjood@college.