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.