Cambridge Budget Growth May Require 8% Property Tax Increase, City Officials Say

City staff are projecting that even if Cambridge’s operating budget grows at a conservative rate, the city may need to raise property taxes by at least 8 percent in the future, according to officials at a Tuesday City Council hearing.

The meeting of the Council’s Finance Committee comes as councilors and other officials are growing increasingly concerned about Cambridge’s unsustainable spending. Though councilors insisted Tuesday that the city was “not in crisis at all” financially, it has already raised property taxes by 9 percent and is bracing for further increases and trade-offs.

“Even if the operating budget [growth rate] stays at 3-and-a-half to 4 percent — and that’s just covering the things that we do, and we don’t think we’re going to get rid of,” Councilor Paul F. Toner said, “it’s going to potentially be an 8 percent increase the next year, in the next couple of years.”

“I just hope we all keep that in mind that anything we add to what’s on the plate now is going to tip us over that amount,” added Toner, who co-chairs the Finance Committee with Councilor Patty M. Nolan ’80.

Over the past 10 years, abundant tax revenue, federal Covid-19 relief funds, and low interest rates led to more and more municipal spending — resulting in a nearly $1 billion dollar city budget.

But a slowing commercial real estate market and dwindling federal funds mean the city’s spending habits will need to adjust.

“Not only have we been coming through a period where there’s been significant revenue growth in the city over many years — and that’s changing — we are also coming through a time where there have been such substantial federal dollars that we’ve been able to push into our community through ARPA, and that is also coming to a close,” said City Manager Yi-An Huang ’05, referring to the federal American Rescue Plan Act.

Though Nolan, the other committee co-chair, recognized the city’s changing fiscal position, she emphasized that municipally-funded programs are worth protecting.

“We have tripled the amount of spending on affordable housing over the last six years,” she said. “We’ve instituted universal pre-K. We have a community safety department.”

Huang acknowledged that Cambridge has “had the resources for so many years to go over and beyond what most cities and towns can do” in terms of social programs. But he said that the city’s current fiscal situation necessitates a shift in mindset.

“The one thing that has been really difficult for us to do, is to say, ‘How do we think about making some of these trade-offs?’” Huang said. “Because we haven’t really had to.”

Councilor Catherine “Cathie” Zusy said she was optimistic about locating areas where the city can save on costs without cutting important services.

“Since we have staffed up some in certain ways, I would hope and expect — and I think the Council has hoped — that that would lead to some efficiencies in certain departments,” she said. “And if those conversations have to happen at the Council level, bring ’em on.”

Councilor Sumbul Siddiqui began to respond with a quip before thinking the better of it.

“I was gonna make a joke about government efficiency,” she said, “but too soon, maybe.”

—Staff writer Benjamin Isaac can be reached at benjamin.isaac@thecrimson.com. Follow him on X @benjaminisaac_1.