The City Council last night instructed City Manager James L. Sullivan to draft legislation permitting Cambridge to hold a lottery to raise money in the wake of Proposition 2 1/2.

Mayor Francis H. Duehay '55 sponsored the order, calling a lottery one "of a number of ways we might be able to offset the effects of Proposition 2 1/2," the massive tax cut approved by Bay State voters earlier this month.

The council will have to vote again before it can submit a bill to the state legislature to request permission for the lottery.

Two councilors--David Wylie and Thomas Danehy--spoke in opposition to the proposal, and other members of the council said they may not vote for final approval of the idea.,

"Lotteries are the most degrading way for a local government to raise money that the human mind can devise," Wylie said, adding that existing lotteries, including Massachusetts' extensive "Game" program, constitute a "regressive tax that hurts low-income people most."

What Indeed?

Wylie added that he would rather see public employees facing layoffs because of Proposition 2 1/2 "out on street corners with tin cups an hour a week" than approve a lottery.

And Danehy argued that lotteries often create incurable gamblers and disrupt family life. "I hear they have clinics now for lottery-holics," he said.

But Duehay said he thinks Cambridge could implement a "creative" lottery. "Maybe people could bet on the outcome of the Harvard-Yale game," he said.

"If it's a choice between holding a lottery on the one hand, and shutting down our schools and scuttling public programs, then it may be a necessary idea," Duehay said.

Duehay said the state-run lottery "represents a major funding source that the state government has abrogated to itself."

The lottery proposal is one of a number of bills proposed recently to alleviate the effects of Proposition 2 1/2, which will slash property tax revenues and could force hundreds of layoffs and the elimination of dozens of city programs, Cambridge officials said.

Other ideas--all contingent on state approval--include an end to property tax exemptions for city universities and colleges, an end to city payments for the Massachusetts Bay Transportation Authority, and possible implementation of a city payroll or income tax.

The council also voted to send to the planning board a proposal to extend the city's moratorium on institutional conversion of residential housing to other uses.