The City Council last night passed a record annual budget and appointed a three member committee to meet with Governor Volpe about the proposed inner belt highway through Cambridge.

Although the Council cut a record $65,000 from City Manager John J. Curry's budget estimate, the figure of approximately $22,189,000 remains the highest ever approved. The paring operation was the most extensive since 1940, when the Council rejected the entire budget estimate.

Curry predicted that the new budget would cost each taxpayer an additional seven dollars per year. The actual figure will be indefinite until the "cherry sheet," final statement of last year's city income, is published.

Major increases went to wages and salaries, to the welfare department ($260,000), to City Hospital ($125,000), and to payments for maturing debt ($247,000) and interest on the general debt ($130,000).

In his budget report, Curry also fore-saw a large increase in the city's share of the MTA deficit, although the cherry sheet will determine the final figure. Last year the city paid about $1,700,000 to the Authority, whose tax-exempt lands Curry termed "among the most extensive and most valuable in Cambridge.

Exemption of the MTA from local taxation "unwisely" removed pressure on that group to sell off its excess land. "Most of this property, if wisely sold, could revert to the tax column of the City," Curry wrote.

To See Volpe

The Council named members Thomas M. McNamara, Cornelia B. Wheeler, and Andrew T. Trodden to meet with the Governor about establishing a route for the inner belt that would be least harmful to Cambridge.

McNamara, the committee's sponsor, declared he did not "want to have the city destroyed in the interests of a highway program that is debatable at this time."

"Half the population is in a state of chace," he said. "They do not know whether they can repair their homes or whether they will have to move."

Councilor Alfred E. Vellucci's amendment stipulating that the inner belt come down Memorial Drive failed to pass (5-4). "Put it under the Charles, or over the Charles, but don't bring it down to our neighborhood," Vellucci asserted