Council Begins Consideration Of Citywide Tax on Payrolls

The Cambridge City Council last night began considering a proposal for a payroll tax--a levy that would force Harvard, the city's largest single employer, to pay thousands of dollars in taxes.

The council sent the proposal to its finance committee for consideration, but several councilors said the expected the measure will pass easily. If the council approves the proposal, it will be sent to the state legislature in the form of a home rule petition, which must be approved by both houses and signed by the governor before becoming law.

Proponents of the proposal last night said last month's passage of Proposition 21/2, which will sharply restrict local property tax revenues, makes the payroll tax necessary. Harvard and other universities, exempt from the property tax, currently pay taxes only on real estate not used for academic purposes.

"A payroll tax would spread the need for additional revenues among those with the capacity to pay," city councilor David Sullivan, who drafted the home rule petition, said yesterday.

If approved by the legislature, the tax would be the state's first local fundraising device other than auto excise and property taxes, Sullivan added.

Louis Armistead, Harvard's assistant vice president for government and community affiars last night called the proposal "interesting" but said Harvard had as yet "nothing to measure its impact by."

Proposition 21/2, passed over-whelmingly by state voters last month, will cut property tax revenues by nearly $15 million in Cambridge next year. City officials have warned of possible large-scale layoffs and cutbacks in city services.

"But I don't see Harvard making any noise about 21/2," city councilor Alfred E. Vellucci charged last night. "I don't see them making any attempt to come to the aid of the people of Cambridge."

Over the past month, various city councilors have urged an end to the University's exemption from property taxes, and called on Harvard to increase its voluntary in-lieu-of-tax payments. They have also asked city assessors to investigate possible taxes on furnishings and equipment in University buildings