Cambridge Finance Committee Warned of Eroding Tax Buffer as Growth Slows

CAMBRIDGE -- February 28, 2024, Cambridge Finance Committee opens FY25 budget season with warning that the city's financial cushion is shrinking. Assistant City Manager for Fiscal Affairs Claire Spinner and City Manager Yi-An Huang told the committee Wednesday that slowing new construction will compress Cambridge's Proposition 2 1/2 excess levy capacity, currently about 75 percent of the city's allowable limit, potentially to near zero by FY30 if spending is not moderated. The preliminary projection calls for a 10 percent tax levy increase in FY25, bringing the levy to roughly $633 million, driven by a $23 million school budget increase, $18 million in salary and benefit growth, $10 million for universal pre-kindergarten, and $10 million in additional debt service tied to the Tobin School reconstruction. Vice Mayor Marc McGovern pushed for internal program evaluation alongside tax-side discipline, warning "we're very good at adding things; we're not so great at evaluating them." The committee voted 7-0 to adjourn, with a capital spending follow-up meeting set for March 19.